What is a Money Market Account?
A Money market account is a saving account offered by banks and credit unions. It's similar to a traditional saving account because its safe and will pay you interest on your money. However, a money market account will normally pay you more interest then a traditional savings account. Also unlike a traditional savings account, money market accounts usually offer check-writing privileges. Money market accounts tend to require you to maintain a minimum monthly balance and have initial opening deposit anywhere from $1,000 to $25,000, which is higher then the average traditional savings account. Interest rates on money market accounts and saving accounts differ from area to area. My advice is to shop around and compare rates so that you can make an informed decision on whether or not placing your money in a money market account is the right choice for you. Below I have included a list of pros and cons : Pros
-Funds in money market accounts are easy to liquidate and can be withdrawn as cash or transferred to other accounts.
-Money market accounts are a safe investment because they are insured by the FDIC up to $250,000.
-Money market accounts earn higher interest than savings accounts.
-Money market accounts are a good option for retirees or investors who prefer to earn a high interest on their money with the least possible risk, while maintaining direct access to their funds and being insured against loss Cons
-Money market accounts allow only a few withdrawals per month.
-If the money market account falls below the minimum required balance, or it exceeds the limited number of transactions, you'll have to pay a fee.
-A money market account typically requires a higher minimum balance than a savings account, and will penalize you if it drops below the minimum.
-some MMA pay a monthly fee
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