What can be a potential drawback of a money market account?

A potential drawback of a money market account is that it may offer limited interest rates compared to certificates of deposit (CDs). Money market accounts typically provide higher interest rates than traditional savings accounts but may not reach the rates provided by CDs, especially for longer-term investments. CDs usually lock in a higher rate for a fixed term, which can be more attractive for individuals willing to commit their funds for a specific period. This comparison highlights that while money market accounts can be a safe place for liquidity, their rates might not maximize the potential earnings compared to locking in funds with a CD.

The other answer choices point out different features of money market accounts. For example, while some accounts might have high fees, this is not universally true for all money market accounts; some offer low or no fees. Similarly, while certain accounts may have minimum deposit requirements, this can vary widely among institutions and is not a defining characteristic of all money market accounts. Lastly, money market accounts typically allow access to funds without penalties, unlike a CD, where withdrawals are limited until maturity. Thus, limited interest rates when compared to CDs accurately capture a key trade-off for those considering their investment strategies.