How to open a money market account

If you’re reviewing your finances and decide you want to earn more interest while still having easy access to your savings, you may want to consider opening a money market account.

“A money market account is like a hybrid checking and savings account,” says Sarah Li-Cain, who specializes in financial writing and runs a personal finance podcast called Beyond the Dollar.

A benefit of a money market account is that it can offer a higher interest rate than your average savings or checking account. At the same time, you’ll typically receive a debit card or checks that you can use to spend the money stashed in your money market account.

This hybrid option is a good choice if you want to grow your money with interest but also need easy access to your cash. If this sounds like you, your next thought might be, “how do I open a money market account?” Easy. “It’s no more difficult than opening a savings or checking account,” Li-Cain says.

You can start the process of opening a money market account by comparing account offerings from different financial institutions.

Choosing the right money market account

While opening a money market account is a pretty straightforward process, rates, fees, and requirements may vary from financial institution to financial institution. Before you open a money market account, you may want to compare your options to determine which account will best suit your needs.

“There are lots of great online comparison websites where you can search according to location, features, and even how much money you intend to open the account with,” Li-Cain says. These websites can help you narrow in on your top choices.

As you learn how to open a money market account and compare offerings, you may want to consider the following:

• The account’s annual percentage yield (APY). Your account’s APY indicates how much interest you will earn on your savings. The higher the APY, the more interest you will earn. This could be an especially important factor if you’re keeping larger funds in your money market account. As you compare APYs, make sure you understand if there are any balance requirements. For example, you could earn one APY for balances under $100,000 and a higher APY for balances that surpass that threshold.
• Minimum balance requirement. Some money market accounts may have a minimum balance requirement that’s higher than your checking or savings account. If you don’t maintain the balance, you might have to pay a monthly fee, and it could impact your APY if the account has a balance threshold to trigger a higher rate. If you don’t want to closely monitor your balance and worry about your deposits and withdrawals, you could consider an account with no minimum balance fee.
• Withdrawal options. If you’re most excited about opening a money market account for the access to cash, confirm that the funds in your money market account can be accessed by ATM, debit card, and check. If you’re all about withdrawing from the ATM, make sure the financial institution has conveniently located, no-fee machines. With Discover’s Money Market Account, for example, you have access to over 60,000 no-fee ATMs, some of which are located at the stores you may already frequent.^** Note that with a money market account, federal law limits the number of certain types of withdrawals to six per calendar month. The limit doesn’t apply to ATM withdrawals or official checks that are mailed to you.^*
• Account fees. Understand when and why you may have to pay a fee. Not hitting a minimum balance requirement, withdrawing money at affiliated ATMs, check writing, and excessive withdrawals could trigger fees, for example. Some financial institutions also charge a fee for bank checks, stop payments, and wire transfers. If fees are a concern, note that with Discover’s Money Market Account, you won’t be charged an account fee.***

How to open a money market account

If you’re learning how to open a money market account, know that the exact steps will depend on where you open your account. Here’s a rundown of the general process to open a money market account:

1. Submit an application. “You should be able to open most money markets online, over the phone, or at a local branch,” Li-Cain says. For example, you can open a Discover Money Market Account online or by calling the U.S.-based customer service line at 1-800-347-7000. When filling out an application to open a money market account, you may have to share or decide:
   • Your personal information, such as your name, date of birth, taxpayer identification number/Social Security number, mother’s maiden name, address, employment status, and income.
   • Whether you want to add a joint owner. If yes, you may need their personal information.
   • Whether you want to add a beneficiary who will receive the money in the event of your death. You’ll also need your beneficiary’s personal information.
   • If you want to receive checks to use with your account.
   • How much you want to deposit or transfer into the account.
2. Complete any verification requirements. You may have to submit or upload copies of identification or income-related documents to confirm the information from your application. For example, to verify your address, a utility bill or lease with your name and address on it may be needed.
3. Fund your new money market account. When you open a money market account, you may have to set up an initial deposit to meet the minimum funding requirement. If your funds weren’t deposited during the application process, you’ll need to do that soon after your account is open.

Once you open your money market account, you can arrange automatic transfers from other accounts to make use of its higher APY. You may also be able to ask your employer to directly deposit your pay, or a portion of it, into the account.

Putting your money market account to work

Since opening a money market account can mean a competitive APY and access to your cash, it can help you save for certain types of large purchases—while still having liquidity if needed. A money market account may also be a good place to keep your emergency fund.

“The funds will only be drawn down in the event of a large, unexpected event and will allow for easy withdrawal when the cash is needed, while earning a higher interest rate over your checking and general savings account,” says Matthew Fizell, a financial planner with Irvine Wealth Planning Strategies. Note that most experts suggest you keep enough cash in your emergency fund to cover at least three to six months of expenses.

“Money market accounts are a great option for those who consistently have extra cash on hand in their personal checking accounts,” Fizell adds. A checking account, however, could be a better fit for day-to-day spending.

If you’re ready to learn more about a Discover Money Market Account, click here.

^* Federal law limits certain types of withdrawals and transfers from savings and money market accounts to a combined total of 6 per calendar month per account. There are no limits on ATM withdrawals or official checks mailed to you. To get an account with an unlimited number of transactions, consider opening a Discover Cashback Debit account. If you go over these limitations on more than an occasional basis, your account may be closed. See Section 11 of the Deposit Account Agreement for more details.

^**Some ATMs have limited hours and/or restricted access. You may be charged a fee by the ATM owner if you use an ATM that is not part of our no-fee network. If you encounter any issues using the ATMs displayed on this site, please contact us at 1-800-347-7000.

*** Outgoing wire transfers are subject to a service charge. You may be charged a fee by a non-Discover ATM if it is not part of the 60,000+ ATMs in our no-fee network.