If you want to earn more interest on your savings but keep the same level of protection that a checking or savings account offers, consider moving your deposits to a money market account (MMA).

These deposit accounts (not to be confused with money market funds) are offered by banks and credit unions, which means they're usually insured by the Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Administration (NCUA) up to $250,000 per depositor, per institution.

How does FDIC insurance protect money market accounts?

FDIC insurance protects you from losing the funds in your money market account and other deposit accounts if your bank fails. This insurance covers up to $250,000 of your principal deposits and accrued interest in each account category at any given bank.

It's possible to have more than $250,000 in insured money market account deposits per bank if you spread the funds across multiple account ownership categories. For example, you'll have a total of $750,000 worth of coverage if you place $250,000 each into an individual account, a joint account, and a trust.

What happens to money market accounts if the bank fails?

If your bank does fail — like First Republic Bank and Silicon Valley Bank both did in 2023 — the FDIC will intervene to protect your deposits in one of two ways:

• Bank sale: Arrange for a healthy bank to buy your bank and take over management of your account(s).

• Direct payment: Pay you by check, up to the insured limit on each account, typically within two business days of the failure.

For balances above the covered amount, you may not get the money back. If the bank fails, you'll receive a claim against the estate of the closed bank and a Receiver's Certificate as proof of the claim. After the insured deposits are reimbursed, you might get payment for your uninsured deposits as the bank's assets are liquidated over the following years.

NCUA insurance for money market accounts

Credit unions also offer insurance on MMAs and other deposit accounts, but the coverage is provided by the National Credit Union Share Insurance Fund, which is administered by the NCUA.

Like FDIC insurance, NCUA insurance covers your MMA deposits up to $250,000 per account category if the credit union fails. These are the other ways FDIC and NCUA insurance are similar:

• Insurance covers your principal and accrued interest.

• If the credit union fails, it will be purchased by another credit union or you'll receive a check for your insured balance.

• Checks are typically issued within a few business days of failure.

For MMA balances that aren't insured by the credit union, it could take months or years to get the money back while the credit union's assets are liquidated, and you may receive some or all of your deposit amount that wasn't covered. The good news is that no credit union member has ever lost a single penny of insured savings.

How do I know if my money market account is FDIC- or NCUA-insured?

You can talk to your bank or credit union to confirm that your MMA is insured. If you want further confirmation — perhaps because you're vetting a new financial institution — you can use these tools to look up each account:

• Bank accounts: Use the FDIC's Electronic Deposit Insurance Estimator or call 877-275-3342 (877-ASK-FDIC).

• Credit union accounts: Use the NCUA's Share Insurance Estimator.

What events are not covered by FDIC insurance?

FDIC insurance does not cover MMAs against all losses. However, your bank likely has other coverage and protections for special circumstances that could affect your deposits, including:

• Banker's blanket bond: Covers bank funds that are stolen or lost due to fire, flood, earthquake, or embezzlement.

• Electronic Funds Transfer Act: Allows you to dispute incorrect or unauthorized electronic transactions, such as ATM withdrawals and debit card purchases. Your liability is limited to $50 if you report an incident of fraud within two days.

Tips for maximizing FDIC or NCUA insurance benefits

It's possible to have more than $250,000 of your cash deposits covered by insurance. If you want to deposit larger amounts, the key is to spread the money around strategically. Here are some ways to do that:

• Deposit the funds across multiple account categories, such as single and jointly held MMAs.

• Open MMAs at multiple banks or credit unions.

• Use free services such as MaxSafe or Impacts Deposit Corp, which spread your deposits across multiple banks to get you more insurance.

• Open an MMA at a bank that belongs to the Depositors Insurance Fund, since these banks insure unlimited deposits.

Keep in mind that MMAs aren't the best place to deposit large sums of money since you can earn higher interest rates on other types of deposit accounts. For funds that will be deposited for a year or more, consider other FDIC-insured accounts, such as a certificate of deposit. To earn even bigger returns, you may want to invest some of the money in a mutual fund or retirement account.