Like almost any financial product, money market accounts have a number of advantages, but they also have some disadvantages that could make them less appealing for some people.
Withdrawal and transfer restrictions: Regulation D is a federal law that restricts you to six “convenient” transactions — such as withdrawals and transfers — from savings and money market accounts per month. These accounts are meant to be vehicles for savings, so the Federal Reserve actively discourages taking money out of them too often.
Only certain types of transactions are subject to Regulation D, including:
- Electronic transfers
- Wire transfers
- Debit card purchases
- Check withdrawals
- Automated bill pay
Transactions that aren’t subject to Regulation D include:
- ATM withdrawals
- ATM transfers
- In-person transactions at a bank branch
Funding requirements: Money market accounts typically have higher opening and ongoing balance requirements than savings accounts. This is especially true for money market accounts that offer