A money market account (also called a money market deposit account) is a bank or credit union deposit, insured by the FDIC or NCUA up to the limits. A money market fund is a mutual fund, usually held at a brokerage. It is not FDIC insured and can lose value, even though it aims to keep a steady $1 share price.
What’s the difference, side by side?
| Question | Money market account | Money market fund |
|---|---|---|
| What it is | A bank or credit union deposit | A mutual fund that holds short-term debt |
| Where you usually have it | Your bank or credit union | A brokerage or fund company |
| Insured? | Yes, by the FDIC or NCUA up to the limits (FDIC) | No. “Not guaranteed by the FDIC like bank accounts are” (SEC) |
| Can it lose value? | No, up to the insurance limit | Yes, though it aims for a steady $1 share price |
| What it pays | Interest | Dividends |
| Tax form | Interest appears on Form 1099-INT (IRS Topic 403) | Generally reported as dividends, not interest (IRS Publication 550), on Form 1099-DIV |
| How it looks on a statement | An account number at a bank | A fund name, a ticker symbol and a share price, usually $1.00 |
Is a money market fund FDIC insured?
No. A money market fund has no FDIC insurance (SEC). If your brokerage fails and fund shares are missing, SIPC may step in, but SIPC does not protect against the fund losing value (SIPC).
Where does a brokerage “sweep” put my cash?
Uninvested cash in a brokerage account is often swept into a bank deposit or into a money market fund. A bank sweep can be FDIC insured up to the limit at each bank; a fund sweep is not. Your statement or account agreement says which program you are in (SEC investor bulletin).
How can I tell which one I have?
Look at the statement. A fund shows a ticker symbol and a share price, usually $1.00. A deposit account shows an account number at a bank. Or ask the provider one question: “Is this a deposit or a fund?”
Common questions
Is a money market fund FDIC insured?
No. A money market fund is an investment, not a bank deposit, so FDIC insurance does not apply, even if you buy it through a bank. It aims to keep a steady $1 share price but can lose value.
Is a money market account FDIC insured?
Yes. A money market deposit account at an FDIC-insured bank is insured up to $250,000 per depositor, per bank, per ownership category. At a credit union, NCUA insurance applies.
Are money market fund payouts interest or dividends?
The IRS says amounts from money market funds should generally be reported as dividends, not as interest.
Sources
Each source was checked on October 8, 2026. Rules and limits can change; when it matters, check the source.
- FDIC: Understanding Deposit Insurance, updated April 1, 2024
- SEC Office of Investor Education: Money Market Funds – Investor Bulletin, updated November 4, 2024
- SEC Office of Investor Education: Cash Sweep Programs: Uninvested Cash in Your Investment Accounts, updated May 14, 2025
- IRS: Publication 550, Investment Income and Expenses, updated April 30, 2026
- IRS: Topic no. 403, Interest received, updated October 7, 2026
- SIPC: What SIPC Protects
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