A money market account is a federally insured deposit account that pays interest while still letting you get to your cash quickly, usually through checks, a debit card or a transfer. That combination of yield and easy access is the whole pitch, but the fine print on minimums and withdrawal rules determines whether that liquidity is as real as it sounds.
Why Banks Even Bother Offering These
Up to $250,000 per depositor, per institution is protected if a bank fails, the same coverage that applies to a regular savings account. Credit unions offer the equivalent protection through the National Credit Union Administration, so the insurance story is identical no matter where you bank. What banks get out of it is a pool of relatively large, stable deposits. They take that money and put it into short term, liquid holdings such as Treasury bills or municipal bonds, then pass along a slice of what they earn as your interest rate. That's the entire mechanism: you're lending the bank a stable pile of cash, and it pays you a bit more than a typical savings account for the privilege.
The catch is that