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Your money market accounts rate could exceed the interest rates offered for other types of savings accounts. Banks and credit unions can offer interest rates for money market accounts that exceed other savings account rates on conditions such as these: your money market account balance must consistently exceed a minimum amount; and you must limit your withdrawals according to the financial institution’s policies.
Your money market accounts rate can earn you a return on your money without subjecting your money to risk because money market accounts at banks and credit unions are insured by the FDIC or NCUA, respectively. Consider the information provided below to evaluate the interest rates and account requirements for the money market accounts that are currently available at banks and credit unions.
Money Market Accounts Rate
What are money market accounts (MMAs)? They are a type of investment savings account offered by either a bank or an investment brokerage firm. The money you place in an MMA is usually invested in a Certificate of Deposit (CD) or other stable financial product. The FDIC insures money market accounts held by banks, so if you have under $100,000 in your account, your money is safe.
Unlike a high yield savings account, you’re typically required to make a minimum deposit into the money market account, and maintain a minimum balance. However, the tradeoff is that the money market accounts rate of return is higher than a savings account.
Many people use MMAs for their “emergency funds”, because the money market accounts rate provides a safe return on investment. If, however, you need to take money out of an MMA, most banks provide checks for these accounts, and allow a certain number of withdrawals per month. Just remember that you must leave a minimum amount of funds in a money market account, or face stiff penalties for over-withdrawal.
When comparing MMAs, consider the money market accounts rate of return, fees associated with opening and maintaining an account, the amount of access you have to your money, the minimum deposit amount, and the minimum balance required.
