Account Minimums

A disadvantage of money market deposit accounts is the high minimum balance requirements in order to avoid fees. Money market accounts usually require an average balance of at least $5,000. This is significantly higher than a savings account, which can have an account minimum as low as $50.

Rate of Return

Money market deposit accounts have one of the highest rates of return for FDIC-insured accounts along with certificates of deposit. Money market deposit accounts are often tiered, meaning the more money that you have in the account the higher the rate of interest that is paid. However, a disadvantage of the interest rates on money market deposit accounts is that it will not match the potential rates of return on riskier investments like stocks.

Liquidity

Money market deposit accounts are fairly liquid accounts, meaning the money can be accessed fairly easily. They are more liquid than certificates of deposit because there is no maturity date on the account. Because of their higher minimum balance requirements, they are not quite as liquid as savings accounts. However, a disadvantage of a money market deposit account is that it is not as liquid as a checking account because you can only write three checks per month, but it is much more liquid than stocks and bonds that must be sold or cashed in before you can use the money.

Fees

References

Resources

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