Are Money Market Accounts FDIC-Insured?

Yes, money market accounts at FDIC-member banks are FDIC-insured up to $250,000 per depositor, per bank, per ownership category. That is the same federal protection that covers your checking and savings accounts. 

If your money market account is at a credit union instead, it gets nearly identical coverage through the National Credit Union Administration (NCUA). The one thing to watch out for is a similar-sounding product called a money market fund, which is not the same thing and is not FDIC-insured.

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Key Takeaways

• A money market account (MMA) at an FDIC-member bank is insured up to $250,000 per depositor, per bank, for each ownership category, and that coverage includes both your principal and any interest you earn.

• A money market account is not the same as a money market fund. The account is a bank deposit that is insured. The fund is a brokerage investment that is not FDIC-insured and can lose value.

Summary generated by AI, verified by MoneyLion editors

What Is a Money Market Account?

A money market account, also called a money market deposit account (MMDA), is an interest-bearing deposit account offered by banks and credit unions. It blends features of a checking account and a savings account. You earn interest like you would with savings, and you often get limited check-writing or a debit card like you would with checking.

Money market accounts tend to pay higher interest rates than a basic savings account. In exchange, they may ask for a higher minimum balance to open the account or to earn the top rate. Some MMAs also limit how many withdrawals you can make each statement period.

Because a money market account is a bank deposit product, it qualifies for federal insurance. That is what makes it a low-risk place to keep an emergency fund or short-term savings.

How FDIC Insurance Works for Money Market Accounts

The Federal Deposit Insurance Corp. (FDIC) is a government agency that insures deposits at member banks. If an FDIC-insured bank fails, the FDIC steps in and makes sure you get your insured money back. According to the FDIC, no depositor has lost a single cent of insured funds since the agency was created in 1933.

The standard coverage amount is $250,000 per depositor, per insured bank, per ownership category. A few important points to understand:

• What is covered: Checking accounts, savings accounts, money market deposit accounts and certificates of deposit at an FDIC-insured bank.

• What is not covered: Stocks, bonds, mutual funds, life insurance policies and annuities, even if you bought them through an insured bank.

• Why it matters: Coverage is automatic. You do not need to apply for it or request it.

One detail catches a lot of people off guard. The FDIC adds up all the deposit accounts you hold in the same ownership category at the same bank. So your money market account, savings account, checking account and CDs at one bank share a single $250,000 limit for that category. They are not each insured separately.

What About Money Market Accounts at Credit Unions?

Credit unions offer money market accounts too, and your money is just as safe. The difference is the insurer. Instead of the FDIC, credit union deposits are protected by the National Credit Union Administration (NCUA) through the National Credit Union Share Insurance Fund.

NCUA coverage mirrors FDIC coverage in every meaningful way; $250,000 per member, per insured credit union, per ownership category. Both are backed by the full faith and credit of the U.S. government. From a federal insurance standpoint, a money market account at a credit union is every bit as protected as one at a bank.

Money Market Account vs. Money Market Fund

When it comes to a money market account and a money market fund, the names sound almost identical, but the products are very different.

• Money market account (or deposit account): A bank or credit union product. It is FDIC-insured or NCUA-insured up to $250,000. Your balance does not go down.

• Money market fund: A brokerage investment product, not a bank deposit. It is not FDIC-insured, and its value can fluctuate in rare cases.

Money market funds try to hold a steady value of $1 per share, but that is not guaranteed. During the 2008 financial crisis, one large fund fell below $1 per share, an event known as breaking the buck.

A simple rule of thumb, if your account is at a bank or credit union and called a deposit account, you are in federally insured territory (via the FDIC for banks or the NCUA for credit unions). If it is at a brokerage and called a fund, it is not FDIC-insured. Money market funds do get some protection through the Securities Investor Protection Corp. (SIPC) if the brokerage fails, but that is different from deposit insurance and does not protect against investment losses.

How To Protect Balances Above $250,000

If you keep more than $250,000 in cash, you are not stuck with only $250,000 of coverage. Because the limit applies per bank and per ownership category, you have a few ways to extend it:

• Spread deposits across multiple banks. Each FDIC-insured bank gives you its own separate $250,000 limit.

• Use different ownership categories. An individual account and a joint account at the same bank are insured separately.

• Add a joint owner. A joint money market account with two owners is insured up to $500,000 at one bank, since each owner gets $250,000 of coverage.

For example, you and your spouse could hold a joint money market account with $480,000, and the full balance would be protected at a single bank because your combined coverage is $500,000.

How To Confirm Your Account Is Insured

Before you open a money market account, it is worth a quick check to make sure your money is protected. Here is how to confirm coverage:

• Look for the official sign. FDIC-insured banks display the FDIC sign in branches and on their websites. Credit unions display the NCUA sign.

• Use the online tools. The FDIC offers an Electronic Deposit Insurance Estimator, and the NCUA has its own insurance estimator to calculate your exact coverage.

• Confirm it is a deposit account. Make sure the product is a money market deposit account, not a money market fund.

The Bottom Line

Money market accounts at banks and credit unions are federally insured up to $250,000, making them a safe place to grow your cash. Just make sure you are opening a money market deposit account and not a money market fund, and you can rest easy knowing your money is protected.

FAQs

Are money market accounts FDIC-insured?

Yes. Money market accounts at FDIC-member banks are insured up to $250,000 per depositor, per bank, per ownership category. Money market accounts at credit unions get the same level of protection through the NCUA.

Is a money market account the same as a money market fund?

No. A money market account is an insured bank deposit. A money market fund is an investment product sold by brokerages and is not FDIC-insured.

Does FDIC insurance cover the interest I earn?

Yes. Coverage protects both your principal and any interest that has accrued, as long as the total stays within your coverage limit.

How can I insure more than $250,000?

Spread your money across multiple FDIC-insured banks or use different ownership categories at the same bank, such as an individual account and a joint account.

Do I have to apply for FDIC insurance?

No. Coverage is automatic at any FDIC-insured bank. You do not need to sign up or request it.

Key Terms

Money market account (MMA): An interest-bearing deposit account at a bank or credit union that combines features of checking and savings accounts and is federally insured up to $250,000.

FDIC: The Federal Deposit Insurance Corp., a government agency that insures deposits at member banks up to $250,000 per depositor, per bank, per ownership category.

NCUA: The National Credit Union Administration, which insures deposits at federal credit unions up to $250,000, mirroring FDIC coverage.

Ownership category: The way an account is owned, such as individual, joint or trust. Each category is insured separately up to $250,000 at the same institution.

Money market fund: A brokerage investment product with a similar name to a money market account. It is not FDIC-insured, and its value can fluctuate.

Sources

• Federal Deposit Insurance Corp: Deposit Insurance 

• Consumer Financial Protection Bureau: What is a money market account?

• National Credit Union Administration: Share Insurance Coverage