Money market accounts offer competitive interest rates while still giving you flexible access to your funds.
You’ve been disciplined about saving. The balance in your account is growing. But every time you check the interest rate on your standard savings account, you can’t help feeling like your money could be working harder. If that sounds familiar, a money market account might be exactly what you’ve been looking for.
Whether you’re an individual building your personal savings or a small business owner looking to maximize your operating reserves, the combination of competitive interest rates and flexible access can make a real difference in how quickly your money grows. But how do money market accounts work, and are they the right fit for your financial goals? Let’s break it down.
Table of Contents
- Money Market Accounts, Explained
- How Do Money Market Accounts Work?
- Money Market Account Pros and Cons
- What Are the Benefits?
- How To Choose the Right Money Market Account
- Summary
- Frequently Asked Questions
Money Market Accounts, Explained
A money market account is a deposit account offered by banks and credit unions that improves on the earning power of a typical savings account.
Unlike a standard savings account, a money market account offers competitive interest rates. First Internet Bank offers money market savings accounts for both personal and business customers:
- Our consumer Money Market Savings account currently offers a 3.09% annual percentage yield (APY)* on balances of $1 million or less and a 3.64% APY* on balances above that threshold.
- Our Business Money Market Savings account offers a 2.94% APY* on balances of $5 million or less and a 3.64% APY* on balances above that threshold.
Both accounts can be opened with as little as $100.
It’s also important to distinguish a money market account from a money market fund. A money market fund is an investment product sold by brokerage firms that invests in short-term securities like Treasury bills and commercial paper. It is not FDIC insured. A money market account, on the other hand, is a bank product that carries FDIC insurance up to $250,000 per depositor, per institution, per account ownership category. That federal protection is a meaningful distinction for anyone who prioritizes the safety of their deposits.
How Do Money Market Accounts Work?
As with any type of account, when you deposit money into a money market account, the bank uses those funds to make loans and other investments. In return, the bank pays you interest on your balance. That interest is calculated using the daily balance method, meaning the bank looks at your balance each day, applies the interest rate and compounds it monthly. You’ll also find that some money market accounts require a minimum balance. At First Internet Bank, you can open a personal or business money market account with as little as $100, but you’ll want to maintain an average daily balance of $4,000 to avoid the $5 monthly maintenance fee on either account. Falling below that threshold won’t close your account, but the fee can eat into your interest earnings.
Extra Flexibility
When it comes to accessing your funds, money market accounts give you more flexibility than a traditional savings account. That said, some institutions still limit certain types of electronic withdrawals per statement cycle. Always check your specific account terms so you know what to expect.
Money Market Account Pros and Cons
Before opening any account, it helps to understand the advantages and the drawbacks. Here’s a clear look at the pros and cons of a money market account.
Why a money market account might be a good fit:
Competitive interest rates set money market accounts apart from standard savings accounts. The national average APY for money market savings accounts sits around 0.56% as of March 24, 2026, according to the FDIC. Online banks like First Internet Bank typically offer rates well above that average — for example, 3.09% APY for personal accounts and 2.94% APY for business accounts — giving your deposits more room to grow.
Access to your funds is another major benefit. For small business owners who need to cover an unexpected expense or jump on an opportunity, that kind of flexibility can be critical. Explore our full suite of business banking solutions to see how we help companies manage their finances.
FDIC insurance provides a layer of security you won’t find with investment products. With a money market account, your money has the full backing of the U.S. government up to $250,000.**
Where money market accounts may fall short:
Minimum balance requirements can be a hurdle if you’re just getting started with saving. Some institutions require thousands of dollars to open an account or to earn the advertised APY, and dipping below the minimum often triggers a monthly fee.
Variable interest rates mean your APY can change at any time. Unlike a certificate of deposit (CD), which locks in a guaranteed rate for a set term, the rate on your money market account will fluctuate based on market conditions and the bank’s discretion. When the Federal Reserve cuts its benchmark rate, your APY may follow.
Transaction limits, while no longer mandated by federal law, still exist at many banks. If you plan to make frequent withdrawals, a personal checking account or business checking account may better suit your day-to-day needs.
What Are the Benefits of Money Market Accounts?
Money market accounts work well for a few specific scenarios.
For Personal Savers
If you’re building an emergency fund, a money market account gives you the dual benefit of earning interest while keeping your cash easy to reach. You won’t face early withdrawal penalties as you would with a CD. First Internet Bank’s consumer Money Market Savings account offers a 3.09% APY,1 well above the national average, with no minimum balance requirement to open.
For Small Business Owners
Small business owners often find money market accounts useful as a place to park operating reserves. Instead of leaving excess cash in a low-interest checking account, you can move it into a Business Money Market Savings account where it earns a competitive return at 2.94% APY.* When you need those funds, you can access them with minimal friction.
Business customers at First Internet Bank also benefit from tools like the Balance Optimizer, which allows for seamless transfers between your checking and savings accounts. And with Zelle® for your business, sending and receiving payments is fast and easy. If your business has more specialized banking needs, our commercial banking services can help you find the right setup.
For Short- to Medium-Term Goals
Savers with a short- to medium-term goal, such as saving for a down payment or a major purchase, may also benefit. The combination of competitive rates and easy access makes money market accounts a practical place to hold funds you’ll need within the next year or two.
How To Choose the Right Money Market Account
Not every money market account is built the same. When you’re comparing options, focus on a few key factors.
- APY and rate tiers. Look at the specific APY you’ll earn based on your expected balance, not just the highest advertised rate. If there’s a tiered structure, your actual return depends on how much you keep in the account. Keep in mind that personal and business accounts may have different rate tiers, so compare the right product for your needs.
- Minimum balance and fees. Find out what balance you need to maintain to avoid monthly fees. Unlike First Internet Bank, some banks require $10,000 or more. Make sure the requirement fits comfortably within your savings plan so fees don’t chip away at your earnings.
- Access and features. Decide how you’ll use the account. If you mostly plan to save and rarely withdraw, a high-yield savings account might serve you just as well. Business owners should look for added tools like automatic transfers and payment options that integrate with their checking account.
- FDIC insurance. Confirm that the institution is FDIC insured. This protects your deposits up to $250,000** and provides peace of mind that your money is safe even if the bank faces financial difficulty.
At First Internet Bank, we’ve built our banking products around giving you competitive rates without complicated fee structures. As an online bank, we keep overhead low and pass those savings along to our customers through above-average APYs.
Open a Money Market Savings Account Today
Your money shouldn’t sit idle when it could be growing. With competitive rates, FDIC insurance up to $250,000** and the flexibility to access your funds when you need them, a First Internet Bank Money Market Savings account puts your deposits to work. Open an account online in minutes and see the difference a better rate can make.
Summary
A money market account combines competitive interest rates with the flexibility to access your funds, making it a practical option for emergency funds, operating reserves or short-term savings goals.
FDIC insurance keeps your deposits protected up to $250,000.** The trade-offs include minimum balance requirements, variable rates and potential transaction limits, so it’s worth comparing accounts carefully.
At First Internet Bank, our consumer Money Market Savings account offers a 3.09% APY* and our Business Money Market Savings account offers a 2.94% APY* — both well above the national average — with just $100 to open either account. Ready to put your savings to work? Open a personal account or business account online in minutes.
Frequently Asked Questions
What is the difference between a money market account and a savings account?
Both accounts earn interest on your deposits, but a money market account — sometimes mistakenly called a money marketing account, typically offers higher rates, especially at higher balances. Savings accounts also tend to have lower minimum balance requirements, which makes them a better starting point for people who are earlier in their savings progress.
Can I use a money market account for everyday transactions?
You can make occasional purchases and payments from a money market account, but it’s not designed to replace your checking account. Banks often limit certain types of electronic withdrawals per statement cycle. If you routinely make dozens of transactions per month, a checking account is a better fit for that activity. A money market account is best for growing your savings while still allowing you to access your funds when you need them.
Will I lose money in a money market account?
Your principal is safe in an FDIC-insured money market account up to $250,000.** You won’t lose your deposited funds. However, fees can reduce your earnings. If your balance drops below the minimum required to waive the monthly maintenance fee, that charge gets deducted from your account. Over time, the combination of fees and inflation could erode your purchasing power, so it’s worth keeping your balance above the minimum threshold.
Does First Internet Bank offer money market accounts for both personal and business customers?
Yes. First Internet Bank offers a consumer Money Market Savings account with a 3.09% APY (on balances of $1 million or less) and a Business Money Market Savings account with a 2.94% APY (on balances of $5 million or less). Both accounts can be opened with as little as $100 and carry a $4,000 minimum average daily balance to avoid the $5 monthly maintenance fee. Business customers also have access to tools like the Balance Optimizer and Zelle® for your business.
*Rates last updated 12/11/2025. Rates are subject to change on any day and will be updated by 10:00 AM EST. Please be sure to check this page after 10:00 AM EST for the rate that will be honored today. Fees may reduce earnings on account. The Daily Balance method is used to calculate interest. The Business Money Market account requires a minimum daily balance above $5,000,000 to obtain the higher stated APY, otherwise the lower APY will apply. To avoid a monthly maintenance fee, you must maintain an average daily balance of $4,000 for the Business Money Market account, $1,000 for the Business Savings account. For additional information, visit our Disclosures page.
**Deposits are FDIC insured up to $250,000 per depositor for each account ownership category. To learn more, visit www.fdic.gov.
1 As of 2/17/2026, the national average annual percentage yield (APY) for Money Market Savings accounts is 0.56%, as published in the FDIC’s Weekly National Rates and Rate Caps; average rate used is for deposits up to $1,000,000. The minimum average daily balance to avoid a fee for a Money Market Savings account is $4,000. Rates are subject to change. Fees may reduce earnings on the account. Interest earned assumes entire amount remains on deposit.
