Traditional Money Market vs. AMMA™

A financial chart overlayed several stack of coins, growing in size meant to indicate an analysis of traditional money market accounts vs AMMA™ accounts

Safety, liquidity, and return are all important factors to consider when choosing and investment vehicle for business cash reserves. Business leaders often have difficulty finding investment vehicles that can provide the best of these factors. Money market accounts are one common choice, but these accounts don’t typically provide all of the benefits that cash managers are seeking. With fintech, business leaders have a new option.

Overview of Money Market Accounts

Money market accounts, sometimes called money market deposit accounts, are a type of account offered by banks that combines the features of checking and savings accounts. Money markets typically have minimum account balances and because they are reserved for customers with high balances, they typically offer higher interest rates than checking or savings accounts.

These accounts have a stated interest rate which is typically between the rates paid on a savings account and a CD. Depositors are usually issued checks or a debit card in order to access the funds in the account but may also have access to online bill pay or transfer tools.

Limitations of Money Market Accounts

Money market accounts can be an alluring alternative to keeping business cash in a savings account or even a CD, which provides higher interest but has limited liquidity. However, there are several limitations with traditional money market accounts that should be considered.

Money Markets have Limited Protection

Money market accounts are covered under FDIC or NCUA insurance through the issuing bank or credit union. In the case of bank failure, the FDIC / NCUA protects the value of bank funds up to certain limits. Money markets, like other bank account types, are covered up to the insurance limit of $250k per account type and ownership category at each member bank. Many businesses find that their cash reserves exceed the FDIC / NCUA limit and additional deposits above that limit are not guaranteed.

Money Markets May Have Limited Transactions

With a money market account, business owners have easier access to funds than with CDs but transactions have historically been limited. Like savings accounts, withdrawals from money market accounts are limited by Regulation D to six withdrawals or transfers per month. These include checks, debit card purchases, and online transfers. In person and ATM transactions were excluded. This rule was amended in 2020 to remove the federal limitations on the number of transfers that can be made from a money market account but the change in legislation does permit banks to continue limiting transactions. Many banks and credit unions are keeping their old rules in place which limit the number of transactions a depositor can make.

Money Markets May Not Provide the Most Competitive Interest Rate

Interest rates for money market accounts are based on a variety of factors including the fed funds rate, bank needs, and market conditions. As of October 18, the average money market deposit account had an interest rate of just 0.08%. Because money market rates are determined based on the needs of each individual bank, some depositors may find that their rates are low compared to other banks in different geographical areas.

AMMA™ as an Alternative to Money Markets

ADM’s American Money Market Account [AMMA™] is a unique investment powered by fintech which allows businesses to access competitive rates from hundreds of banks across the country all in a single account. For reference, rates in  AMMA™ can be 7x higher than a typical money market. In an ultra-low interest rate environment like that of today, this account can help dampen the blow for businesses whose local rates are less attractive. ADM doesn’t replace your bank, we enhance it.

AMMA™ also provides access to extended FDIC / NCUA insurance. ADM’s proprietary fintech helps businesses access extended government insurance past the traditional limits so that virtually any amount of business reserves can be covered. The FDIC and NCUA are a government agencies and funds protected by the FDIC / NCUA are backed by the full faith and credit of the US government. Since FDIC insurance began in 1934, no depositor has lost a single penny of insured funds due to bank failure.

 AMMA™ also provides next-day liquidity. Businesses seeking higher interest rates often turn to CDs as an alternative to money market accounts. These instruments may offer competitive rates, but business cash is inaccessible without stiff penalties. With AMMA™, business leaders have access to competitive rates without sacrificing liquidity. On the other hand, when liquidity is not a top priority, we can develop a CD Ladder strategy that further enhances ROI.

AMMA™ offers access to the ultimate protection and competitive returns for business cash.

There are many alternatives to consider when choosing where to invest business cash reserves, but one stands out above the rest. AMMA™ by ADM offers safety and nationally competitive returns for business cash reserves.

If your business needs a cash management solution, ADM can help. Contact us to get started today.


*American Deposit Management Co. is not an FDIC/NCUA-insured institution. FDIC/NCUA deposit coverage only protects against the failure of an FDIC/NCUA-insured depository institution.

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