What is a money market account?

Answer 1

A money market account could be described as a hybrid between a savings and checking account. For instance, unlike a typical saving account checks can be written against them. They also typically bear higher interest rates than a normal savings account, but have more restrictions. For example, they will likely require a high minimum balance and may restrict the number of withdrawls you can make in a given month.

Answer 2

If you are interested in saving large amounts of money and letting interest build up over an extended period of time, you might want to consider starting a money market account at your bank or credit union.

A money market account is a savings account that has a higher minimum balance requirement and interest rate. Minimum balances for these accounts can range anywhere from 100 to 10,000 dollars, depending on your banking institution. There is also a monthly limit to the number of checks and withdrawals that can be made from money market accounts.

If you are interested in making more money off the money you already have, a money market account is a great savings fund to invest in. Having a limit on the number of withdrawals made to the account each month allows your funds more time to accumulate interest. The 2011 national average interest rate on money market accounts was 0.253 percent. That’s about .04 percent higher than the average savings account.

Do not get money market accounts confused with money market funds. Money market funds is an investment in debt markets. Although these accounts yield more money in the long run, they are not protected by the FDIC and can be accessed at any time.

All money market accounts in the United States are insured by the FDIC, which protects your money from bank failure or other financial mishaps.

Money market accounts are beneficial to both short term and long term financial goals. These accounts are protected by the limited withdrawals and checks, therefore giving your money more time to build interest and grow in the short term. Knowing that your money is collecting interest will give you something to look forward to in the long run.

For more information about opening money market accounts, contact or visit your bank or credit union today.