Here's What Happens if You Pull Your Money Out of Your Money Market Account

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page. APY = Annual Percentage Yield. APYs are subject to change at any time without notice.

KEY POINTS

  • It's okay to switch bank accounts if your needs change or you find a better deal with a different bank.
  • If you pull your money out of a money market account without closing it, however, you could incur fees for falling below a minimum balance requirement.
  • You will also be losing the opportunity to earn as much interest as you could on your money.

Don't lose out on interest.

Sometimes we break up with bank accounts, and that's perfectly okay. It's a good idea to reevaluate your banking needs from time to time (and as your financial circumstances change), and since banks change their offerings, you might find a better interest rate or fewer fees with a new bank. That said, if you have a money market account (or MMA) and are considering taking your money out of it while leaving the account open, proceed with caution.

Money market accounts have features of both checking and savings accounts. You'll earn interest on the money kept in one, as you would with a savings account. And just like with a checking account, you'll be given easy access to the money in one. Money market accounts often come with check-writing capabilities, an ATM or debit card, or sometimes both. Best of all, MMAs are a safe place for your money, as they fall under the protection of FDIC insurance if your bank is covered by it (this means up to $250,000 kept in one will be returned to you should your bank fail). Sounds like a pretty good deal, right? Here's why it's worth keeping yours funded -- or closing it outright if you're changing accounts.

You could be charged fees

Some money market accounts have a minimum balance requirement to keep the account free of fees. Bank fees are worth avoiding under all circumstances, so if your MMA is one that will charge you a monthly fee for falling under that minimum, and you're planning to keep the account open while removing some money from it, ensure that you're leaving enough cash in place.

You won't earn as much interest

Another reason it pays to keep your MMA funded if you have one is that you'll miss out on the chance to earn extra money on top of your existing money -- your account's APY, or annual percentage yield. This comes into play with a money market account in two different ways.

Our Picks for the Best High-Yield Savings Accounts of 2024

APY
up to 4.60%
Rate info Circle with letter I in it. You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.
Min. to earn
$0
APY
4.50%
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APY
4.25%
Rate info Circle with letter I in it. 4.25% annual percentage yield as of May 30, 2024
Min. to earn
$1

First, the more money you keep in the account over a longer period of time, the more money you will make on it, thanks to the wonder of compound interest. For example, if you keep $10,000 in your MMA and earn 4% APY on it, without adding additional money to it, in a year, you'll have $10,407.42. Wait another year without adding to the account, and you'll earn that 4% APY on $10,407.42, giving you an additional $416, for a total of $10,831.43 -- and so on.

The second way you could lose out by removing money from an MMA is if your account has a minimum balance requirement to earn the highest APY, as some do. If you withdraw money from the account and your ending balance is below the threshold, you'll find yourself earning a lower APY.

It's okay to move your money around

All of this isn't to say that if you've got a chunk of money (perhaps your emergency fund?) in a money market account, you absolutely must leave it there. Like I said above, your banking and financial needs are likely to change over time. And these days, high-yield savings accounts are paying APYs comparable to the best MMAs, so if you don't want to worry about minimum balance requirements and don't care about having ATM or check access to your cash, switching to one of these could make sense for you. Just keep in mind that defunding an MMA without actually closing the account could result in losing some precious cash (in the form of fees or lower APY) as a result.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.

Two of our top online savings account picks:

Rates as of May 30, 2024 Ratings Methodology
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SoFi Checking and Savings Barclays Online Savings
Member FDIC. Member FDIC.
Rating image, 4.50 out of 5 stars.
4.50/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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= Excellent
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Rating image, 4.00 out of 5 stars.
4.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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= Excellent
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APY: up to 4.60%

APY: 4.35%

Min. to earn APY: $0

Min. to earn APY: $0

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