A Money Market Account is an alternative to a savings account. An MMA is similar to a savings account, but instead of having a fixed rate of interest, its interest rate varies with the current level of market interest rates.

MMAs are liquid and give you the ability to add and withdraw funds on a daily basis. Even though liquidity is high in MMAs, interest rates are variable and are generally higher than rates on savings accounts. Required minimum balances may be much higher than those required for savings accounts and may be anything from $500 to $1,000 depending on the account. MMAs are safe and are generally FDIC insured. Other features of these accounts may include limited check-writing ability, which means that you can write checks on your money market accounts. There are generally no penalties for early withdrawal from an MMA, as long as you do not go beyond the account's minimum balance. Information on money market accounts and how to purchase them can be found in the Wall Street Journal and at various financial institutions and brokerage houses.