Interest on Interest: The Taxman Cometh for Your Savings When saving money, earning interest on our hard earned cash can be appealing.
However, the taxman reminds us that nothing is truly free – not even the interest on a money market account (MMA). In fact, the interest you earn on your MMA may be subject to taxes.
The principal balance in an MMA is exempt from taxation. The money you deposited yourself has already been taxed as income, so you won't owe taxes on that amount.