Yes, you can usually write checks from a money market account, provided the bank or credit union offers that feature on the specific account you hold. Federal regulations classify money market deposit accounts as savings deposits but explicitly permit transfers and withdrawals to third parties, including by check.1eCFR. 12 CFR 204.2 – Definitions Not every money market account comes with checks automatically, and the ones that do often attach limits on how often you can write them, how small each check can be, and what balance you must keep. Confirm the terms with your institution before you start writing.
How the Checks Actually Work
A money market account that offers check writing looks a lot like a checking account at the counter. The bank assigns a routing number and account number, prints checks with those numbers, and processes them through the same clearing system any personal check runs through. The payee deposits the check, their bank sends it to yours, and your money market balance drops by that amount.
The difference you feel is on the interest side. Your balance keeps earning until the check clears. The national average money market APY sits around 0.43 percent, with the best-paying accounts offering several times that. That makes money market checks a good fit for large, occasional payments like a property tax bill or a contractor deposit, where keeping the money earning until the last moment actually matters.
Watch for per-check minimums. Some banks require at least $250 or $500 per check; others set no floor. Your deposit agreement spells this out, so read it or call before writing your first check.
How Many Checks You Can Write Each Month
Until April 2020, federal Regulation D capped certain money market and savings withdrawals at six per statement cycle, counting checks, online transfers, bill pay, and debit card purchases. Teller and ATM withdrawals never counted. The Federal Reserve suspended that six-transfer rule through an interim final rule effective April 24, 2020.2Federal Register. Regulation D: Reserve Requirements of Depository Institutions The current regulation now defines a money market deposit account as one from which you may make transfers and withdrawals “regardless of the number of such transfers and withdrawals or the manner in which such transfers and withdrawals are made.”1eCFR. 12 CFR 204.2 – Definitions
So federal law no longer caps your monthly check writing. Your bank, however, still can, and many do as a matter of internal policy. Some keep the old six-per-month cap. Others allow ten or more. A few set no cap at all. If you go over your bank’s limit, you may face a per-transaction excess withdrawal fee of a few dollars, and repeated overuse can lead the bank to convert your money market account into a checking account (often at a lower interest rate) or close it. The only way to know your specific cap is to check your deposit agreement or ask.
Balance Requirements and Fees
Money market accounts usually require higher minimum balances than basic checking or savings. Drop below the floor and you can trigger a monthly maintenance fee, and in some cases the bank will suspend your check-writing privileges until the balance recovers. Online banks often charge nothing; traditional banks may charge $10 to $25 per month when the balance slips.
Other fees to watch for:
- Excess withdrawal fees when you go over the bank’s monthly transaction cap.
- Check reorder fees when you need a new book of checks, charged by the bank or an authorized printer at rates similar to personal checking checks.
- Stop payment fees, discussed below.
Pay particular attention to two separate numbers in the deposit agreement: the minimum balance to earn interest, and the minimum balance to avoid a maintenance fee. They are often not the same.
Stopping a Check and Dealing With Stale Ones
If you write a check and need to cancel it before the recipient cashes it, you can place a stop payment order. Under the Uniform Commercial Code, adopted in some form by every state, you have the right to stop payment on any check drawn on your account as long as the order reaches the bank in time for it to act. An oral stop payment order lasts 14 calendar days unless confirmed in writing; a written order lasts six months and can be renewed for additional six-month periods.3Legal Information Institute. UCC 4-403 – Customer’s Right to Stop Payment Most banks charge $25 to $35 for the service.
A check that sits uncashed for a long time can go stale. The UCC says a bank is not obligated to honor a check presented more than six months after its date, though it may choose to.4Legal Information Institute. UCC 4-404 – Bank Not Obliged to Pay Check More Than Six Months After Its Date If you have an outstanding check that has gone stale, call your bank about placing a stop payment and issuing a replacement. Leaving stale checks outstanding muddles your records and your real available balance.
Tax on the Interest
Interest your money market account earns is taxable income. Federal tax law defines gross income to include interest from all sources.5Office of the Law Revision Counsel. 26 U.S. Code 61 – Gross Income Defined You owe tax the year the interest is credited and available, even if you never move it out.
If the bank pays you $10 or more in interest for the year, it must send you a Form 1099-INT.6Internal Revenue Service. About Form 1099-INT, Interest Income You must report all taxable interest on your federal return whether or not you receive a 1099-INT.7Internal Revenue Service. Topic No. 403, Interest Received If the account earns enough to meaningfully shift your tax bill, adjust your withholding or make estimated payments to steer clear of an underpayment penalty.
Practical Tips
A money market account rewards you most when you treat it as a high-interest holding account you occasionally pay from, not a daily transaction account.
- Record every check: number, amount, payee, and date. Because interest is being credited, your running balance shifts between transactions and is easy to misread.
- Verify your balance before writing. Many money market accounts do not offer overdraft protection and will simply reject a check that exceeds available funds, exposing you and the recipient to returned-item fees.
- Fill checks out completely. Write the payee’s full legal name, match the numerical and written amounts, and date the check. A mismatch can delay or reject processing.
- Watch your online banking after issuing a check so you catch a lost check before issuing a replacement.
- Keep your signature consistent with the one the bank has on file. A visibly different signature can get a check flagged.
If you find yourself writing checks more than a few times a month, a regular checking account is probably the better tool. Money market accounts are built for people who want their balance earning real interest and only need the checkbook now and then.