Can A Business Have A Money Market Account? | Cash Rules

Yes, many companies can open a business money market account to earn interest on idle cash while keeping funds accessible for planned payments.

You’ve got cash that needs to sit still for a bit: tax money, payroll float, a buffer for slow months, a down-payment fund for equipment. A standard business checking account keeps it handy, but the yield can feel like spare change. A business money market account can be a clean middle ground—more interest than many checking accounts, with access that’s less rigid than a certificate of deposit.

This article breaks down what business money market accounts are, who can open them, how access works, what to watch in the fine print, and how to set one up without surprises.

How A Business Money Market Account Works

A money market account (MMA) is a deposit account offered by banks and credit unions. It usually pays interest that moves with market rates. Many MMAs come with a debit card, checks, or both, plus online transfers to your other business accounts.

For a business, the appeal is simple: you can keep a larger cash reserve earning interest, then move money out when a known bill hits. Think quarterly taxes, annual insurance premiums, inventory buys, or rent buffers.

Money market account vs money market fund

These sound similar and people mix them up. A money market account is a deposit account at a bank or credit union. A money market mutual fund is an investment product that lives at a brokerage. The rules, risks, and protections are not the same.

Where the safety line sits

At an FDIC-insured bank, deposits in a money market account can be insured up to the FDIC limit, based on ownership category and the bank’s rules for calculating insurance. See the FDIC’s page on understanding deposit insurance for the basic rules.

At a federally insured credit union, share accounts (including money market style accounts) can be insured up to the NCUA limit, again based on ownership category. The NCUA’s share insurance limits page explains how those limits work.

Who Can Open One And What Banks Ask For

Many banks offer business MMAs for common entity types: sole proprietors, LLCs, corporations, partnerships, and nonprofits. The account opening process looks a lot like business checking, with a few extra questions about signers and ownership.

Documents you’ll usually need

• Your business legal name and trade name (if you use a DBA)
• Entity paperwork (state filing, operating agreement, partnership agreement, or corporate resolution)
• Owner and signer identification
• Business location and phone
• Tax ID: SSN for some sole proprietors, or an EIN for many entities

If you need an EIN, go straight to the IRS page to get an employer identification number. It’s free and you avoid third-party fee sites.

Eligibility notes that can trip people up

Some banks reserve their business MMAs for established entities, or they require a minimum opening deposit that’s higher than business savings. Credit unions may require membership eligibility. Also, online banks often allow remote opening, while some traditional banks want you in a branch when the entity has multiple owners.

When A Business Money Market Account Makes Sense

A business MMA shines when cash is truly “parking money,” not spend-money. If you run daily expenses out of it, you can hit transfer caps or fees. If you never touch it, a CD or Treasury ladder may pay more.

Good fits

• Quarterly tax set-asides and sales tax collections
• Payroll buffer for seasonal revenue
• Emergency cash that still needs some access
• Vendor prepayment funds you won’t use for a few weeks
• Sinking funds for equipment repair or a later lease deposit

Access Rules And The Real-World Transfer Limits

People hear “money market” and expect checking-like freedom. In practice, many MMAs behave more like savings accounts with extra access tools.

Federal rules once set a common six-transfer limit for certain “convenient” withdrawals from savings-type accounts. The Federal Reserve removed that limit from Regulation D’s definition in 2020. Still, banks can keep their own monthly caps and fee schedules inside the account agreement. The Federal Reserve’s 2020 announcement is on its Regulation D interim final rule page.

So what should you do with that? Treat withdrawal limits as a product feature, not a federal promise. Before you open the account, read the “transaction limits” section and the fee table. Then set up a routine that stays inside the rules.

Typical access methods

• Online transfers to your business checking account
• ACH withdrawals or external transfers (varies by bank)
• Checks (some accounts issue them, some do not)
• Debit card access (less common for business MMAs, still offered at some banks)

Fees that show up when you use the account wrong

These accounts often look cheap until you step outside the rules. Common costs include excess transaction fees, wire fees, and paper statement fees. The biggest surprise is the minimum balance fee. A bank can advertise a strong rate, then charge a monthly fee if your balance dips below a threshold.

Business Money Market Account Compared With Other Cash Options

The right home for your cash depends on two things: how often you need to touch the money and how much yield you need to make the friction worth it. Here’s a side-by-side that keeps the decision grounded.

Cash Option	Best Use	Trade-offs To Expect
Business money market account	Reserve cash with planned withdrawals	Possible monthly withdrawal caps and balance-tier rules
Business savings account	Simple reserves with fewer features	Often lower rates; fewer access tools
Business checking account	Daily spending and bill pay	Rates often low; cash can sit idle
Certificate of deposit (CD)	Cash you can lock for a set term	Early withdrawal penalties; less flexibility
Treasury bills (via broker or TreasuryDirect)	Short-term cash you can ladder	Not a bank deposit; settlement timing; account setup effort
Money market mutual fund	Brokerage cash management	Investment product; yield varies; no FDIC/NCUA deposit insurance
High-yield cash sweep program	Brokerage-linked cash with automated movement	Program terms vary; access and insurance structure differs by firm
Operating account + separate reserve account	Clean separation of spend vs reserve	Requires discipline and transfer planning

What To Check Before You Choose A Bank

Business money market accounts are not standardized. Two products with the same name can act very differently. Use a simple checklist so you don’t get locked into a bad fit.

Rate structure and tiers

Many banks use tiered rates: higher balances get a higher APY, or the top tier pays on only the slice above a threshold. Ask how interest is calculated. Then run your usual balance range through the tiers and see what the yield looks like across a quarter, not just on your best month.

Minimums and monthly fees

Look for three numbers: minimum opening deposit, minimum daily balance to avoid the fee, and the fee amount. If your balance is lumpy—big tax payment outflows, inventory swings—pick a structure that stays fee-free during low points.

Transaction limits and payment tools

Count how many outward moves you make from your reserve cash each month. If it’s more than a handful, plan to route spending through checking and treat the MMA as the feeder account. Also confirm whether the account includes checks or a card, if you want those options.

Insurance status and account ownership category

Confirm the institution is insured (FDIC for banks, NCUA for federally insured credit unions) and learn how insurance applies to your entity type. Insurance protection is not “per account” in a casual sense; it’s calculated per depositor, per institution, per ownership category used by the insurer.

Taking A Business Money Market Account In Your Cash Plan

Here’s a clean way to use a business MMA without tripping fees: treat it as the reserve pool and link it to business checking. Money comes in, your operating bills flow from checking, and you schedule transfers from the reserve to refill checking on a cadence that matches your business cycle.

Practical setup that keeps it simple

1. Pick a target reserve balance: one month of fixed costs, or a payroll buffer, or a tax set-aside.
2. Open the MMA and set up a linked business checking account at the same institution if transfers are faster inside the bank.
3. Route your reserve cash into the MMA, not into checking.
4. Set a recurring transfer from MMA to checking that covers planned outflows.
5. When a one-off bill hits, do one larger transfer instead of many small ones.

Step	What To Gather Or Decide	What To Check In The Fine Print
Confirm entity details	Legal name, DBA, location, signer list	Signer authority rules, required resolutions
Verify tax ID	SSN or EIN, matching IRS records	Backup withholding rules, name/ID match policy
Plan balances	Typical low balance, typical high balance	Rate tiers, minimum to avoid monthly fee
Map withdrawals	Monthly count of outbound moves	Withdrawal caps, excess transaction fees
Decide access tools	Need checks, card, wires, ACH	Wire pricing, check limits, external transfer holds
Set operating routine	Transfer cadence from MMA to checking	Transfer cutoff times, posting speed on weekends

Questions Business Owners Ask Before Opening One

Will it replace checking?

Most businesses do better with both. Checking is for payments and daily movement. A money market account is for the reserve that should earn interest while it waits.

Can it hold more than $250,000 safely?

You can hold more than that in one account, yet insurance may cap at the limit per institution and ownership category. If you routinely carry balances above the insured amount, use more than one insured institution, use insured cash sweep structures, or split funds across ownership categories when the rules allow. Read the official insurance pages and, if needed, ask the institution to walk you through how they calculate insurance for your entity type.

So, Can A Business Have A Money Market Account And Keep It Simple?

Yes. A business money market account can be a steady place to park reserves, earn interest, and feed your operating account on a schedule. The win comes from matching the product to your cash habits: choose a fee structure you can live with, plan withdrawals in chunks, and keep everyday spending in checking.