Business Money Market Account: The Better Home for Your Extra Business Cash

If you’ve ever opened your business checking app, saw a healthy balance, and thought, “Nice… but this money isn’t doing anything,” you’re thinking like an owner.

That’s exactly where a business money market account fits. It’s not meant to replace your checking. It’s meant to hold your extra cash—money you want available (for payroll, taxes, slow months, or opportunities) while still earning interest.

I’m going to walk you through everything—plain language, real-life examples, and the “small print” stuff that usually gets skipped.

What is a business money market account?

A business money market account is basically a savings-style business account that can pay interest while still giving you decent access to your money (usually through transfers, and sometimes limited check/debit access depending on the institution).

I like to describe it as:

“A smart parking spot for business cash that you want safe and ready—but not constantly moving.”

The kind of money that belongs here

This account is best for money like:

• tax money you’re holding so you don’t accidentally spend it,
• payroll buffer,
• emergency cushion,
• cash saved for a planned purchase (inventory, equipment, annual insurance),
• “opportunity money” (when you want to act fast).

Not ideal for:

• daily spending (use checking),
• money you won’t need for a long time (you might earn more elsewhere).

How a business money market account works (without the boring talk)

1) You earn interest (usually variable)

Most money market accounts pay a variable rate, meaning it can go up or down over time.

Owner tip: Don’t build your budget assuming the rate will stay the same. Treat interest as a bonus, not your plan.

2) Many accounts use tiered rates (this is where people get tricked)

A lot of business money market account options use tiered interest rates—higher balances unlock higher rates.

Here’s what that looks like in real life:

• Balance tier A earns rate A
• Tier B earns more
• Tier C earns the best rate

So when you see a flashy number online, the real question is:
“Do I earn that rate at MY balance?”

Quick example:
If the top rate starts at a very high balance, but you typically keep a moderate cushion, you may earn much less than the headline rate.

What you can actually do with the money (liquidity in real life)

A business money market account is built to keep cash accessible—but not for constant daily spending. Many offer limited transactional features like check-writing or debit access (not always, depends on the account).

My simple rule

• Checking = money you touch all the time
• Money market = money you might touch occasionally
• Long-term options = money you won’t touch for a while

If you try to use your money market account like checking, that’s when limits and fees show up and ruin the whole point.

Limits & rules: what most people misunderstand

The “six transactions” thing (what’s true now)

There used to be a rule that limited certain “convenient” withdrawals/transfers from savings-style accounts to six per month. The rule was changed so institutions can allow more flexibility, but many banks still keep limits or fees in their own account terms.

So the reality is:

• some accounts still cap certain withdrawals (often around 6),
• some charge a fee if you go over,
• some don’t care—but you must confirm.

What to ask before opening:

1. Do you cap withdrawals/transfers?
2. Which transactions count (online transfers, bill pay, debit, checks)?
3. What’s the fee if I go over?

Fees & minimums: where businesses lose money (quietly)

This is the part that decides whether your account helps you… or drains you.

1) Minimum balance requirements

Some accounts require a higher minimum balance to earn the best rate—or sometimes to avoid fees.

Owner tip: If your cash flow is seasonal, pick an account where you can realistically meet the minimum even during slow months.

2) Monthly maintenance fees

Many accounts waive the fee only if you maintain a certain balance.

3) Excess withdrawal fees

Some banks charge for going over the monthly transaction limit (when they enforce one).

4) “Hidden” friction costs (ask about these)

Not every bank charges these, but when they do, they add up:

• wire fees,
• cashier’s check fees,
• paper statement fees,
• stop payment fees,
• returned item fees.

My trick: When you compare accounts, write down:

• “What fees are most likely in my business?”
  Because a business that sends wires weekly has totally different needs than a solo consultant who never sends one.

Safety: how protected is a business money market account?

A money market account (deposit account) is different from a money market fund (investment product). People mix these up constantly.

Money market account (deposit product)

If held at an insured institution, deposit insurance coverage can apply up to limits and categories.

Money market fund (investment product)

A money market fund is an investment product, and the protections/risks are different from insured deposit accounts.

Plain advice: If your goal is “safe reserve cash that I might need next month,” the deposit-style account is usually the simpler fit.

When a business money market account is the perfect move (real scenarios)

Scenario A: You’re holding tax money

You collect revenue, but taxes aren’t due yet. Keeping that money in checking is risky because it feels “available.”

How I’d set it up:

• Checking = daily operations
• Business money market account = “Tax Reserve” bucket
• Auto-transfer weekly based on revenue

This builds a habit: taxes become a system, not a stressful surprise.

Scenario B: Payroll makes you nervous (totally normal)

Even profitable businesses can feel tight if invoices are late. A payroll buffer reduces stress.

Rule of thumb style thinking:
If one slow-paying client can mess up payroll, you want a payroll reserve bucket.

Scenario C: Seasonal business

During peak season, cash piles up. During slow season, it drops fast.

A business money market account helps you “store the summer money” so you don’t accidentally run your off-season operations like it’s still peak.

Scenario D: You want to move fast when an opportunity hits

Maybe it’s discounted inventory, a great ad window, or a new contractor you want to lock in.

The point is: money that’s accessible + earning interest beats “money sitting idle.”

When it’s NOT the right choice

A business money market account may not be ideal if:

• you need frequent outgoing transactions (it can become annoying or costly),
• your balance is usually low (minimums/tiered rates may not work in your favor),

Comparison table: business money market account vs other options

How to choose the right business money market account (the checklist I actually use)

Step 1: Decide the job of this account

Pick one main purpose:

• taxes,
• payroll buffer,
• emergency fund,
• planned purchases,
• general reserves.

Step 2: Estimate your usual balance range

Not perfect—just realistic.

Step 3: Ask these questions (copy/paste list)

1. Is the APY variable? (How often does it change?)
2. Is the rate tiered? What do I earn at my balance?
3. Any monthly fee? How is it waived?
4. Any withdrawal/transfer cap? What counts?
5. Fee if I exceed the cap?
6. How fast can I move money to checking (same day vs next day)?
7. Can I set multiple users + permissions (owner, manager, bookkeeper)?
8. Any cash deposit limitations (if you handle cash)?
9. Do alerts exist (low balance, large withdrawal, transfer count)?
10. What documents are required to open?

My favorite way to use a business money market account: the “cash buckets” system

This is a simple setup that works for most businesses without turning your finances into a complicated mess.

Bucket 1: Checking (Daily Moves)

• vendor payments
• payroll processing
• subscriptions
• normal spending

Bucket 2: Business money market account (Reserve Cash)

• taxes
• payroll cushion
• emergency fund
• planned purchases

Bucket 3 (optional): Long-term / Fixed plan

• money you don’t need soon (set it aside intentionally)

Real-life tip: Name the money market account based on purpose:

• “Tax Reserve”
• “Payroll Buffer”
• “Emergency Cash”
  When it has a name, you’re less likely to raid it impulsively.

Quick FAQ

1) Is a business money market account the same as a business savings account?

Not exactly. They’re both savings-style, but money market accounts often come with different rate structures (like tiers) and sometimes more transactional features.

2) Can I make unlimited withdrawals?

Some institutions allow more flexibility now, but many still set their own limits/fees—so you have to check the account terms.

3) Are deposits protected?

If your account is held at an insured institution, deposit/share insurance can apply up to limits and categories (rules vary by institution type).

4) Why do rates change?

Money market account rates are typically variable and can move with broader market conditions and rate changes.

5) What’s the biggest mistake business owners make with these accounts?

Using the account like checking (too many withdrawals), and ignoring minimums/fees that cancel out the interest.

Helpful resources (external links)

• Money market account basics (plain-language explainer). (Consumer Financial Protection Bureau)
• Deposit insurance overview. (FDIC)
• Share insurance overview (credit union-style accounts). (MyCreditUnion.gov)
• Official update on transfer-limit rule changes. (Federal Reserve)
• Why some banks still enforce limits (easy explanation). (Bankrate)