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Money Market Account
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by: stickystebee
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When investing in a money market account it is important to know what exactly a money market account is. A money market account is an account that you deposit money into that has a relatively high interest rate. A great added bonus with a money market account is that it requires little to no advanced notice before withdrawing money; working similarly to a checking account at times. This however is not a checking account since it receives interest; just a savings account that a check can be written upon. Some banks also issue debit cards on the money market account to make withdrawing your money quicker and easier.
One thing to keep in mind is that a money market account and a money market fund are two different things, not the same. A money market account is an account that you deposit the money into and then earn interest on it; a money market fund is made up of assets that a bank or brokerage hold on behalf of the investors. Money market accounts are also FDIC insured so if something happens to the bank your money up to a certain limit is insured much like a motgage bond for your home.
With money market accounts the bank or credit union usually puts a limit on how often you can withdraw money; but remember you are earning higher interest. When deciding whether to open a checking account, savings account, or money market account it is always best to talk to the bank about the way the interest on all of the accounts will work. If you know that you do need some access to your money quickly, but only once in a while, then it might be worth looking into a money market account for your savings since you could potentially earn more money in interest.
Another thing to keep in mind is that the more money you put into the account the faster you’ll earn interest and the more earning potential you have.
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