Compared to ordinary savings accounts, money market accounts (MMAs) typically provide higher interest rates. However, like with many high-yield bank accounts, there are frequently limitations on how and when you can access your money.
You may only make six free withdrawals from an MMA per month at certain banks. The majority of transactions (but not all) fall under that limit. And if you go over it, you can be charged fines or even have your funds moved to an interest-free checking account.
Is there a restriction on withdrawals from money market accounts?
Withdrawal limits apply to many money market accounts. For what reason? Previously, banks had to restrict clients’ access to savings accounts, including MMAs, to six “convenient transfers” each month under Regulation D.
In 2020, the rule was effectively repealed, but many institutions continue to adhere to it.
Your money market account is probably subject to the following rules if your bank imposes withdrawal limits:
- Up to six penalty-free withdrawals are permitted each month.
- ATM and in-branch withdrawals are unlimited.
- You will be subject to a “excessive withdrawal fee” or other penalties for every transaction after you reach the withdrawal limit.
- There can be restrictions on how much you can transfer each day as well as how much you can move overall.
What happens if you take too many withdrawals from your money market account?
Depending on the bank, there may be a fee for excessive withdrawals from an MMA or other savings account. Once more, there are financial institutions that do not place restrictions on the quantity of withdrawals that can be made in a given month.
For those who do, your bank may send you a letter or notice describing the issue and detailing possible fines if you go above the limit. This is what to anticipate:
Charges
After you reach the limit, many banks will impose an exorbitant withdrawal fee on each transaction. Because banks frequently hide this information in the fine print, it might be challenging to identify the cost associated with your account.
Try looking through the bank’s online deposit account agreement or disclosures if you’re comparing money market accounts.
| Bank Name | Withdrawal Penalty |
| Home State Bank | $2.50 |
| PNC | $3.00 |
| Regions Bank | $6.00 |
| National Bank of Arizona | $10.00 |
| Truist | $15.00 (includes withdrawals made at branches and ATMs) |
Declined Payment
This is a less frequent penalty, but the bank may stop processing your transactions if you exceed your withdrawal limit. For example, if you reach your permitted limit on a withdrawal, Synchrony Bank will return checks, deny transfers, and levy a fee.
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Closing the account
The bank may terminate your account if you consistently take out more money than you can withdraw. When this occurs, the bank often transfers your funds to a basic checking account, meaning that there will be little to no interest paid on your contributions.
ChexSystems and Early Warning Systems (EWS), two organizations that compile reports on your financial history, may also be notified of the account closure. You might thus experience difficulties opening a new bank account in the future.
How to prevent fees and penalties for money market accounts?
In a money market account, accrued fees and other penalties can severely reduce your total income. Here’s how to stay away from them:
- At a bank that doesn’t impose excessive withdrawal costs, open an MMA.
- To prevent going over the limit, set an alert or monitor your withdrawals.
- If you have more withdrawals than you are permitted to make, take them out at a bank branch or an ATM that is part of the network.
- For cash you need on a day-to-day basis, move it to a checking account.
- Maintain the required minimum balance (if applicable) to avoid paying a monthly maintenance fee.
- Enroll in online banking to avoid paying a paper statement fee.
