The earlier you begin investing, the better your payoff will be, so begin investing as soon as you can afford to do so.

An important piece of advice along these lines is to pay yourself first, and then invest . If you contribute, even in small amounts, to a smart savings or investment plan. youll see the results add up quickly.

If youre mired in debt, do your best to get out of debt before worrying about investing. But once youve paid off all of your loans, start investing some of your monthly income to build for your future .

A simple and effective plan for investing, especially for beginners, is opening a money market account.

What Are Money Market Accounts?

While Id classify myself as an intermediate player in the world of investing, we all have to start somewhere. When I first began investing, one of the first vehicles that I took advantage of after getting out of debt was a money market account. A money market account is just one of the many types of savings accounts that most banks and credit unions offer, so what should you consider in choosing it over one of the other options?

Features & Advantages

1. Higher interest rates - Money market accounts usually provide better monthly returns than basic checking or savings accounts.
2. Check-writing and withdrawal - Youll have more access to your money than you would in a CD or other long-term investment.

Limitations & Disadvantages

1. Higher minimums - Money market accounts obligate you to commit more cash to your account, usually a minimum balance of $1,000, sometimes more.
2. Withdrawal limits - Youll face a regular limit on transactions per month, and usually a maximum dollar amount for withdrawals too.

Basically, youll get an above-average return without a lot of obligation, but you wont have complete flexibility. Keep in mind that a money market account is different from a money market fund, which is a type of mutual fund that has its own set of requirements and restrictions.

Is It Right For You?

A money market account is great way for you to start out on the path of investing, especially if you dont know much about the ins and outs yet. Yes, your money is invested, but you are not the one managing the day-to-day moves. The banks do that for you.

Though the return on your money wont be as high as it would be if you were investing on your own, the account can be your introduction to the game of investing. Its a safe and secure investment vehicle. Money market accounts also pay you monthly dividends. with compound interest. That means the interest that you earn is automatically reinvested in your account, allowing you to earn interest on your interest!

Where Is Your Money Invested?

Your bank will invest your money in short-term debt obligations. This plan maximizes the safety of your money but still provides a decent return. These short-term debt obligations are usually from highly rated companies and government agencies.

Did you catch all of that? Well, the bottom line is: A money market account is one of the safest routes for investing your money. Youre not going to retire on the interest you earn, but its a perfect starter account to get you moving until you become more investment savvy.

Choosing the Right One

Now that you understand exactly what a money market account is, how do you pick the right one? Consider the five core aspects of a how a money market can fit your needs.

1. Know Your Risk

Money market accounts are generally safe and conservative, but some have slightly riskier investment options than others. Be sure to choose one that is within your comfort zone.

2. Check Your Minimum

Choose an account with a minimum balance requirement within your means. Going broke just to start a money market isnt a good idea. Also, keep in mind that dipping below the minimum means penalties will apply.

4. Dont Forget About Fees

All money market accounts come with some bank fees and charges. Make sure you read the fine print and understand monthly and annual fees, as well as penalties, before deciding on an account. Some fees are the same across the board, but some charges vary by account.

5. Go Interest Shopping

Although you shouldnt expect too much of a difference in interest rates from bank to bank, the percentages can vary. Shop for the best rate. Because some online banks have lower internal costs, they can offer higher interest rates.

Two great money market account options you might want to look into are EverBank and Ally Bank .