A business money market account (MMA) is a bank deposit account that combines features of checking and savings — offering higher yield than a standard checking account plus limited check-writing or debit access. Used by businesses to earn yield on idle cash while maintaining liquidity.
A business money market account is a demand deposit product that occupies the middle ground between checking (full liquidity, lower yield) and CDs (higher yield, locked funds). MMAs typically offer higher interest rates than checking or basic savings accounts while allowing a limited number of transactions per month — typically 6 outgoing transfers or payments, though this limit was suspended by the Federal Reserve in 2020 and some banks have not reinstated it. MMAs are commonly offered by both traditional banks and online banks. Business MMAs may require minimum balances to earn the highest advertised rate — for example, a bank may offer 4.50% APY on balances above $50,000 and 0.25% APY below that threshold. Check the minimum balance requirement against your typical idle cash level before opening. FDIC coverage applies at $250,000 per depositor per insured institution (https://www.fdic.gov/resources/deposit-insurance/). For businesses with significant idle cash, MMAs at multiple institutions can extend FDIC protection. In business lending, a strong MMA balance supports a loan application as evidence of liquidity and financial discipline. Some lenders count MMA balances toward 'liquid reserves' requirements. MMAs are often used alongside a primary operating checking account — operating cash flows through checking, idle cash is swept to MMA to earn yield.
Business MMAs and savings accounts are similar products. Key differences: (1) MMAs typically require higher minimum balances to earn top rates but often offer check-writing access or a debit card; (2) Savings accounts may have simpler fee structures. In practice, many banks use the terms interchangeably. Check the specific account terms — minimum balance, transaction limits, and APY tiers — rather than relying on the label.
Many business MMAs allow limited check-writing (often up to 6 checks per statement cycle). Some banks issue a debit card tied to the MMA. This limited liquidity is the feature that distinguishes MMAs from CDs — you can access funds if needed without penalty, just with transaction frequency limits.
Yes. Deposits in business money market accounts at FDIC-insured banks are covered up to $250,000 per depositor per institution. Businesses with balances exceeding $250K should either spread funds across multiple institutions or use CDARS / IntraFi programs to extend coverage.