What is a money market account?

A money market account is accurately described as a type of savings account that typically offers higher interest rates compared to standard savings accounts. These accounts are designed to provide a combination of savings features and check-writing privileges, but they usually require a higher minimum balance to open and maintain.

One of the key characteristics of money market accounts is that they invest in low-risk, short-term securities, which allows them to offer better interest rates. However, they may limit the number of transactions (such as withdrawals or transfers) that can be made each month, which distinguishes them from traditional checking accounts.

This option stands out because it highlights the primary functions and benefits of a money market account, emphasizing its role in saving rather than investing in stocks, incurring fees, or being used for credit purchases, which would not accurately represent the nature of a money market account.