A money market account is offered by banks as a way to keep your money protected, as well as help you gain interest. A money market account is similar to a savings account, but offers easier access to your money through check writing and debit cards.
Money Market Accounts
When you put your money into money market savings accounts, you are allowing the bank to use your money for different types of loans which include boats, cars, homes or small businesses. This may sound unsafe that banks are lending your money to others, but it is safe if the bank is FDIC insured. By investing your money in an FDIC insured bank you are guaranteed that if the bank fails, your money will be protected by the government, up to the legal limit, which is usually $250,000 per depositor.
A money market account is similar to a savings account. Savings accounts tend to require lower opening deposits and minimum balances, but a the best money market accounts can offer higher interest rates. Money markets provides easier access to your money, but they do have regulations on how many withdrawals you can make each month. Be aware of this number, because if you withdraw money more times per month than the allotted amount, you will be charged a fee. You can withdraw money, but you don’t have the same freedom with a money market account as you would with a checking account.
Checking accounts have unlimited withdrawals, which is great for the money used on a daily basis. A money market account has limited withdrawals because its purpose is to help you save money and gain interest.
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