A Guide on the Money Market Account vs. Money Market Fund


Susan Kelly

Dec 03, 2023

The banking sector and the funding world come with a whole bunch of linguistics that can easily surpass the head of an average user. However, while hard, it is still a necessity to fully understand all aspects and terms that you come through in order to make the best decision for yourself, right?

We believe that the primary reason why you ended up in this article is also the same. You heard about the two terms, Money Market Account and Money Market Fund, and, for instance, thought they were the same, only to realize that they are actually quite different. So, do you want to know what these differences are in order to gain a better understanding? This article has you covered.

What is a Money Market Account?

The Money Market Account is a type of savings account that is opened at a bank or a credit union. These accounts are secured federally and provide users an interest on their deposits. While this account type inclines towards saving time, it is pretty, not just that. Instead, many MMA banks allow users with checking account features like limited withdrawals per month. Customers with an MMA account are issued ATM cards and checkbooks as well.

What is a Money Market Fund?

Money Market Funds, also referred to as Money Market Mutual Funds, lack federal insurance, unlike their aforementioned counterpart. Nonetheless, they remain relatively secure and easily accessible investment options. Within Money Market Funds, a fixed interest rate is not offered; instead, users' returns are generated from the underlying investments held in fund form.

The Aspects of Which Money Market Account and Money Market Fund Differ?

While the above definitions might have given you a run-down on the fundamental difference between a Money Market Account and a Money Market Fund, we are sure you’d want to look into more profound differences as well, right? Well, lucky for you, we have a thorough breakdown of the Money Market Account vs. Money Market Fund based on different aspects. Here you go!

Method of Investement

Funds in Money Market Accounts are typically deposited via a bank or credit union, with interest earned on the account's balance. In contrast, Money Market Funds allocate their clients' funds into various low-risk money market instruments, including Treasury securities, municipal securities, short-term corporate debt, and other similar instruments.

Type of Account

The account types differ massively two in both these aspects. While a Money Market Account is an insured savings account linked with a credit or union bank, the Money Market fund is a mutual fund.

In the Money Market Fund (MMF), the contributions of all participants are pooled and expertly overseen for investment in low-risk, short-term debt instruments. The resulting benefits are then shared with the account holders.

Interest Rate

The interest rates in both these aspects differ massively as well. While the Money Market Account has a fixed interest rate, which users receive every time, the Money Market funds don’t operate on the same principle. In fact, in the Money Market Fund, the interest is variable based on the overall returns of the fund’s underlying investments and what the overall outcome will be. Hence, in the latter, you can have a different interest rate each time.

Fund Availability

The Money Market Funds have to be bought and sold similarly to a mutual fund, and hence, they do not provide users the same daily access to money as the Money Market Account does. Users might have to wait until the next business day to withdraw their funds and may also have to transfer their funds from the brokerage account to their bank.

On the other hand, funds kept in the Money Market Account are always available to access or withdraw. Users are given ATM cards and checkbooks on the basis of which they can withdraw their money.


Tax is one inevitable aspect, and you will always have to pay taxes on the return that you earn through money in both of your accounts. However, while tax payments need to be made, the money market fund would help you avoid federal and state taxes. However, what needs to be considered is that the taxation will depend on the types of funds people invest in.


Money Market Accounts impose maintenance fees on users when the account balance falls below the specified threshold. Nevertheless, users have the option to potentially decrease or completely eliminate these maintenance fees through the practice of comparing different options available in the market.

Insurance and Risks

Money Market Accounts and Money Market Funds both come with insurance coverage. The MMA is insured by either the FDIC or the NCUA, whereas the money market fund is insured by the SIPC.

Where Can You Get it?

Do you think that you can get both the Money Market Account and Money Market Funds from the same place? Well, no, this is not the case. In fact, the Money Market Account is available through banks and credit unions, while users can avail of the Money Market Funds through brokers and investment firms.

Wrapping Up!

If you are someone who is confused about whether the Money Market Account and Money Market Funds are the same aspects, then we hope this article helped you understand the differences between them. The two aspects, while aligned on similar tangents in some ways, they also differ vastly in the other. Let us know whether this article was helpful for you or not, and we hope you make the right decision in choosing the best aspect for yourself.


Related Stories

Privacy Policy | Terms of Use

© 2024 jquehorse.com

Contact us at: [email protected]

Testimonials/success stories may be fictionalized / should not be viewed as expected results