Considerations

If you are considering opening a money market account, understand that the interest banks and credit unions pay on them vary, because some institutions are more anxious to attract your deposits than others. Also, many banks and credit unions will pay you more interest if you keep more money in your account. And, the rates that institutions pay on money market accounts can be changed without notifying you. Finally, many institutions will charge you a fee, if you fail to maintain a minimum balance or you exceed its limit on withdrawals. If you are interested in opening an account, check with several banks to see their ground rules.

Features

Money market accounts set limits on how often you can withdraw or transfer money each month, depending on the withdrawal or transfer method you use. For example, an account may allow up to six withdrawals per month by check, electronic debit card or transfer. Other transactions, such as ATMs and telephone check payments may not have a limit. Each month, you will receive a statement that sets out the transactions that have taken place during the preceding month, along with the fees you have been charged.

Potential

Because money market savings accounts pay more interest than regular savings accounts, they have become especially popular for people who are saving for their retirement. Since the so-called Baby Boom Generation has begun to retire, the future for this type of bank account is very bright. Also, during difficult financial times, many investors will choose to leave the stock market and put their money away in a money market account until the economy improves.

Money Market Funds

References

More Like This

What Is the Difference Between a Savings Account & a Money Market Fund?

Requirements to Open a Money Market Account

How a Money Market Savings Account Works

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