Can you write checks from a money market account?

Although money market accounts are similar to savings accounts in many ways, one difference between them is that most money market accounts allow you to issue a limited number of checks each statement cycle.

Money market accounts come with variable interest rates that can be much higher than rates for other types of bank accounts. They offer more flexibility than a savings account, but can still come with transaction limits. Account holders are generally limited to six withdrawals from a money market account each month, which affects the number of checks that can be drawn from the account.

Here’s what you need to know about money market accounts and their check-issuing privileges.

Writing checks for money market accounts: how does it work?

Most money market accounts allow the account holder to issue a limited number of checks each month.

Banks and credit unions also generally limit the amount of withdrawals that can be made from a money market account to six per month. This includes most electronic, telephone and check withdrawals. If an account holder exceeds the limit, they may incur penalty charges. However, there is generally no limit to the number of checks that can be deposited into the account.

For example, Ally Bank allows six withdrawals each month from its money market account. There is a $10 fee for transactions that exceed this limit, although the bank is temporarily refunding this fee due to the impacts of COVID-19.

Not all money market accounts impose a limit on the number of checks you can write. The Navy Federal Credit Union, for example, allows unlimited withdrawals by any method from its Money Market Savings Account. However, it requires a higher minimum balance – $2,500 – to earn interest.

The check-writing privileges associated with money market accounts are a major difference from traditional savings accounts. But while they allow check withdrawals, money market accounts are still similar to savings accounts in that they are classified as non-transaction accounts and can therefore impose limits on withdrawals. Money market accounts can earn higher rates than checking and savings accounts, so be sure to research the best rates available.

Why do some banks limit the number of checks you can write?

Under a Federal Reserve regulation, known as Regulation D, money market accounts are classified as non-transaction accounts. These types of accounts are designed primarily for saving and investing money, while transaction accounts (checking accounts) are for day-to-day spending and other frequent transactions. Non-transaction accounts were historically only allowed six withdrawals per month, including check withdrawals, under the settlement.

The Fed changed Regulation D in April 2020, so the six-withdrawal limit is no longer legally enforced. Many banks and credit unions still maintain the savings and money market account limit, even though it is not a federal requirement.

Although there may be limits on check withdrawals from money market accounts, certain types of withdrawals not included in the federal six-per-month limit are often still unlimited today. These include withdrawals made in person at a branch, by mail or at an ATM.

How to write a check from a money market account

Money market accounts sometimes come with a free set of checks, but you can also order checks directly from banks or other third-party providers. Make sure the account number on the check matches your money market account number.

To write the check, fill in the various required fields with payment information, including:

  • The date
  • The recipient of the check
  • Amount paid, spelled out
  • Amount paid, written in figures
  • A memo
  • Signature

It’s also important to keep track of your bank or credit union’s withdrawal limits and the number of withdrawals you’ve made during the month. If you make a check withdrawal that exceeds the bank or credit union limit, a fee may be charged to the money market account.

At the end of the line

Although it’s best to use a checking account for frequent transactions, such as day-to-day expenses and paying bills, money market accounts can also be used to write checks, if needed.

Pay attention to any limits your bank or credit union may place on the number of withdrawals you can make each month from a money market account. Most financial institutions limit withdrawals from money market accounts to six per month, and withdrawals made by check count towards this limit. Avoid going over the limit so you don’t have to pay any additional fees.

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