Which is a common feature of a money market account?

A money market account often requires a minimum balance to open the account and to avoid fees. This feature helps banks manage their liquidity and ensure that they have enough capital in the account. The requirement encourages account holders to maintain a certain level of funds, which is beneficial for both parties; the bank can offer a higher interest rate on the account compared to a standard savings account, while the holder can earn more interest on their savings.

On the other hand, while money market accounts may allow some limited transactions or checks, they typically have restrictions on the number of withdrawals in a month, which distinguishes them from traditional checking accounts. Additionally, money market accounts are not primarily intended for short-term loans; they are designed to hold funds and earn interest. Thus, they do not function identically to traditional checking accounts, which generally offer transaction features without a minimum balance requirement.