Money market accounts are a great way to safely invest your money when you want to earn more than the typical savings account, but still want to have a low risk investment option. Money market accounts can vary from bank to bank or lending institution. Credit Unions even provide their members with money market accounts. Competitive rates with an investment that provides you with what you’re looking for in a money market account venture can be found with a little shopping in the marketplace.
Money market account earns you a higher yield than a normal savings account; and still retains access to your funds.
Many investors find money market accounts to be one of the best savings options for emergency funds for expenses up to six months. If you want a long term investment for a higher interest rate, but may possibly need your money sooner than three or six months a money market account is a better option than a certificate of deposit or savings account.
Most money market accounts offered allow investors to write checks on the account similar to a checking account. Most banks will limit the amount of checks that can be written on your account free of charge. This number can vary between institutions. Nonetheless, tons of investors love this attribute of a money market account because it permits you to have easy access to your funds whenever you need them. Other similar long term investments that will penalize you for removing your funds before a maturity date. The only penalty for removing your funds is less principal monies in your account which can result in less interest earned over the long term.
In addition to having easy access to your funds through withdrawal whenever you want, money market accounts are insured by the FDIC or Federal Deposit Insurance Corporation up to the maximum allowed by law. The FDIC coverage was created after the Great Depression because of the number of banks or institutions that failed. If the lending institution is in trouble or your monies are lost for any reason, the federal government will cover that loss if the bank is unable to.
Although money market accounts don’t bring you the highest rate of return for long term investments, they will provide a nice rate of return for savings of at least $5000 or more. Though, one drawback of many investors for money market accounts is they may have a balance requirement that can range from $5000-$10,000 per month. You can shop around and find some lenders that will offer a lower balance requirement ranging from $1000-$2500. Usually the higher the investment, the more interest is paid on your money market account.
The marketplace offers a variety of lenders, interest rates and options for money market account investments. Shop around and find one that matches your needs.
Choosing the right money market account is like walking through a market place - look carefully and you'll soon find one that suits your needs.