All You Need To Know About The Money Market Account
All You Need To Know About The Money Market Account: What is a money market account? People looking to invest and earn greater returns (who isn’t?) would likely explore every option they possibly can. In this endeavor, chances are a money market account would pop up and it is a good thing to understand all that you can with it!
Money Market Account – What is it?
A money market account is actually a savings account. How then does it differ from a traditional savings account? There are two major ways:
- It earns a higher rate of interest than a traditional savings account
- The requirements for minimum balance and the minimum deposit is also quite a bit higher than that for a basic savings account.
When considering a money market account, it is important to first of all ascertain the interest rate being offered, as many accounts offer roughly the same rate as those being offered on a basic savings account.
Why should you consider a money market account?
To decide whether or not you should open up a money market account, it is important to understand what is a money market account?
It would be wise to open a money market account if:
- The interest rate being offered on the banks money market account is higher than a basic savings account
- The bank allows access to the funds in the account fairly quickly
- There is room to withdraw money through checks about six times a month, as well as a debit card that can be used the same amount of times
- A money market account is an excellent option if a person wishes to deposit larger sums of money and thus wants added security of an insured account.
However, there are some important points to be kept in mind:
- A money market account is quite different from a money market fund, as the fund can lose value if the market falls.
- It is not a checking account, but some may offer debit card and check-writing features.
- If what you require is a basic account and you do not need to write checks, then you would probably be better off with a savings account.
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