Are you back and forth on opening a money market account? There are a lot of people that are searching for higher interest rates on their savings accounts but they just do not know where to turn. A money market account is a great option to consider exploring as you can easily earn a higher interest rate from a traditional savings account offered by your local bank.
Money Market Account Definition
So what is the official definition for a money market account? It is an account where you will put away money to be saved and you will earn interest money for doing so. Money market accounts do have limitations from a traditional savings account, but they still earn a higher interest rate.
Save More, Earn More
In order to qualify for the best rates you need to consider how much money you are able to place into the money market account. Some high yield money market account rates are going to be significantly higher but they have deposit requirements. Other accounts will follow the rate set by the Federal Reserve but may include account fees and other things that can reduce your ability to save. What makes money market accounts attractive is that the interest is compounded daily so you will be able to earn more money if you can make several deposits a month and it helps you to reach your investment goals quickly compared to traditional savings accounts.
Opening An Account
Once you compare money market account rates and you have found one that you feel will be able to work well for your needs you can usually open the account online in just a few minutes. Usually banks will ask that you open the account with at least $1 but you could have a larger amount required based on the way the account is set up.
Always have a good understanding of the money market account before you open it. You need to make sure you will not have account maintenance fees and other things that come out of nowhere. While money market accounts do provide you with a low risk investment to saving money, they do carry some risk thanks to account fees and balance requirements. Make your decision carefully by comparing rates and finding the best bank for your situation.