Money Market Funds

What’s the difference between a Money Market Account and a Money Market Fund?

Money Market Account
Formally known as a money market deposit account or MMDA — is a bank product. Most banks and credit unions offer them at no charge.
Money Market Fund
Technically a money market mutual fund or MMF — is a mutual fund available through mutual fund companies as well as some banks and brokerages. More

	Money Market Account (MMDA)	Money Market Mutual Fund (MMF)
Safety	Yes. Guaranteed not to lose value	The safest mutual funds available, but not guaranteed.
Minimum Investment	$100 to $2,500, depending on institution	Generally $2,000
Checkwriting	Yes. Generally limited to 3 a month	Yes. Generally limited to 3 a month
Income	High interest — generally about twice the interest rate of a passbook savings account Compounds daily Paid monthly	High dividend income— generally higher than MMDA interest rates Compounds daily Paid monthly
Interest Rate Fluctuates	No	Yes. Yield fluctuates daily but share price managed to maintain $1.00 per share
FDIC Insurance	Yes	No
Where Offered	Banks and credit unions	Mutual fund firms, some banks, brokerages
Withdrawals	Generally limited to 6 a month, including checks	Generally limited to 6 a month, including checks
ATM Card	Yes	Yes
Low Balance or Excess Transaction Fee	Possible	Possible
Management Fees	No	Yes — annual account fee plus annual expense ratio
Invests In	Savings bonds, CDs	Invests in diversified portfolio of top quality short term "debt instruments": U.S. government and agency securities Treasury bills
Biggest Risk	Inflation risk — risk that your investment return won’t be high enough to keep pace with inflation	Inflation risk — risk that your investment return won’t be high enough to keep pace with inflation
100% Liquidity	Yes	Yes