Are Money Market Accounts FDIC Insured? Money Market 101

In this article, weโ€™re answering โ€œAre money market accounts FDIC insured?โ€ The short answer is yes, they are.

Even foreign non-residents who can meet the onboarding expectations of US banks can access FDIC-insured money market accounts.

Weโ€™ll break down the nuances below along with answers to the most common questions we receive about money market accounts.

Feel free to use the table of contents to jump ahead to the sections most relevant to you.

Table of Contents

  1. Are Money Market Accounts FDIC Insured?
  2. What Are Money Market Accounts?
  3. Who Can Open Money Market Accounts?
  4. Frequently Asked Questions
  5. Do You Want Help Opening Bank Accounts?

Are Money Market Accounts FDIC Insured?

Yes, money market accounts are FDIC-insured up to USD 250,000. In fact, while money market accounts at US banks are FDIC, money market accounts at US Credit unions are insured by NCUA for the same amount (USD 250,000).

What Are Money Market Accounts?

Money market accounts are interest-bearing accounts in the United States, offered by both US banks and credit unions. Money market accounts offer higher interest rates than checking accounts and more functionality than savings accounts.

Additionally, money market accounts provide easier access to your money than traditional investment opportunities but they are still backed by the US government through FDIC-insurance, similar to credit union accounts backed by NCUA.

Money Market Account vs Savings Account

The main difference between money market accounts and savings accounts is that money market accounts typically pay higher interest and have minimum deposits while savings accounts pay a slightly lower interest rate and often have very low minimums.

Additionally, money market accounts also allow account holders to make payments and issue checks, which savings accounts do not allow. With this in mind, money market accounts offer a higher interest and are more functional.

Money Market Accounts vs Checking Accounts

The main difference between money market accounts and checking accounts is that money market accounts offer higher interest rates while checking accounts offer more convenience.

Additionally, to reflect the higher interest rates offered by money market accounts, there are usually restrictions on the number of withdrawals that can be made per month. On the other hand, checking accounts are designed for day-to-day transactions and make withdrawing and accessing funds easily.

Expected Money Market Accounts Rates

Expected money market account rates can vary widely from bank to bank, change during different economic cycles, and fluctuate depending on the deposit being held in the account. With this in mind, the average interest rates on money market accounts presently can range from 0.25% to 5.00%, depending on the factors referenced above.

Who Can Open Money Market Accounts?

Anyone can open money market accounts in the United States if they have a relationship with a US bank. In fact, most banks and credit unions offer relatively attractive rates when customers deposit into money market accounts.

However, itโ€™s important to note that both local residents and foreign non-residents can open US money market accounts. Additionally, money market accounts held in the United States by foreigners are still FDIC (or NCUA) insured.

Frequently Asked Questions

Below are a few of the most common questions we receive from people looking into if money market accounts are FDIC insured. If you have further questions you would like to ask our team, donโ€™t hesitate to get in touch.

Why Is a Money Market Not FDIC Insured?

Money market accounts are FDIC insured. In fact, money market accounts are insured up to USD 250,000 by both the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA). That said, a money market fund is considered an investment product and the balance is not FDIC insured for this reason.

What Is the Downside of a Money Market Account?

The two main downsides of money market accounts is that they are less convenient than a checking account and generate less return than other investments. In other words, you do not get the same level of convenience and withdrawals can be restricted to a set number per month. So, you wonโ€™t have easy access to your funds. Additionally, because money market accounts offer relatively low returns, you wonโ€™t generate as much of a return as if your money was invested longer term.

Which Money Market Account Is Federally Insured?

All money market accounts are federally insured by either the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). In both instances, money market accounts are insured up to the maximum allowable limit of USD 250,000.

Is Money Market Safer Than Checking Account?

No, a money market account is not safer than a checking account. This is because both money market accounts and checking accounts are both FDIC-insured equally, for a maximum of up to USD 250,000. In other words, they are equal when it comes to safety when held at the same bank.

However, if your money market accounts are at different banks, then you should consider the underlying safety of the bank instead of the type of account.

Do You Want Help Opening a US Bank Account?

If so, you can get access to GlobalBanks USA (our dedicated US account opening service) in just a few clicks.

GlobalBanks USA is a 100% personal account opening solution. It provides direct access to our team of US banking experts.

When you join, you receive…

+ Expert suggestions on where to open US bank accounts.

+ Step-by-step support to navigate US account opening.

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+ Plus, detailed guides to maximizing the value you get from your new US bank account.

And “yes!” GlobalBanks USA helps foreigners and non-resident individuals open accounts.

In fact, GlobalBanks USA even helps non-resident US LLCs and foreign & offshore entities.

Use the link in our menu above to learn more about GlobalBanks USA. Or, contact us directly with any questions!

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GlobalBanks Team
GlobalBanks Team

The GlobalBanks editorial team comprises a group of subject-matter experts from across the banking world, including former bankers, analysts, investors, and entrepreneurs. All have in-depth knowledge and experience in various aspects of international banking. In particular, they have expertise in banking for foreigners, non-residents, and both foreign and offshore companies.

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