What Are Money Market Accounts?

Are you looking for a new way to bank? Do you want a financial product that offers competitive interest rates but is still insured by the FDIC? If so, then look no further than a money market account. 

Money market accounts — also known as hybrid accounts — are a type of deposit account that acts as a checking and savings account. You can write a check to withdraw funds (though there’s a limit to the number you can write each month), and the bank invests your money market account funds for you. 

Money market accounts offer several features and benefits that traditional bank accounts don’t, namely, higher interest rates. However, they do have their limitations, making them less convenient than standard bank accounts. It’s essential to consider these restrictions before you open an account.

If you’re interested in a money market account, DepositAcocunts.com explains how to get one.

Compare Lenders

Just as you would never buy a new home or a new vehicle without checking it out first, you shouldn’t open a money market account with the first provider you see. It’s important to shop around and compare banks and credit unions so you find the best account for your needs. 

Like most financial products, money market accounts differ across the board, so look carefully for the optimal yields and terms. Several websites can help you comparison shop, making the process much easier and faster.

Select Your Features

Of course, like terms and yields, the features each money market account offers also varies. As you compare, consider how frequently you may need to write checks to use the funds in your account. Then, pair down your options to accounts that let you write the number of checks you need in a month.

After that, think about the frequency you will withdraw your funds and find accounts that align with that need. Some money market accounts have low liquidity. Look for ones that don’t impose withdrawal fees when you stay under a certain threshold each month. If you can’t find an option that works for you, your best bet is to pick one that aligns best with your requirements or one with the fewest fees.

Compare Charges And Other Fees

Picking a financial product with minimal monthly fees is always a good idea. After all, you want something that makes your money work for you, not the other way around. There are plenty of banks with money market accounts that don’t have maintenance fees, so stay away from places that do charge them. 

Secondly, try to find an account with no minimum balance requirement, or at least one with lower fees if you don’t meet these criteria. This leads us to the next step…

Assess Minimum Deposit And Balance Requirements 

Think about how much money you currently have. Is it enough to meet the initial deposit amount for new accounts? The deposit requirements are an important factor to consider when searching for a money market account. Every account has one, but if you can find one better suited to your financial situation, you will get more benefits. 

Some accounts require $500, while others request $2,500. Most necessitate similar amounts for minimum balances, or you may find yourself with penalties and other fees.

Reach Out To Banks And Credit Unions That Meet Your Needs

After you make a list of banks and credit unions with money market accounts that align with your requirements, your next step is to contact them and request an application and account information. Depending on the lender, you can do this online, over the phone, or in person. 

If you have an existing bank account with a particular institution, you can probably create a money market account just by calling. Many lenders reward customers with more than one bank account, so don’t be afraid to ask about any potential rewards for opening another account with them. 

As you may find, opening a money market account is easy — the most challenging part is doing the research and comparing. However, once you find an account that you know is best for you, you will be on your way to enjoying all of the benefits that money market accounts have to offer. 

 

Sources
  • Dragon, Debbie. “How to Open a Money Market Account.” Deposit Accounts, 10 Aug. 2009, www.depositaccounts.com/blog/how-to-open-a-money-market-account.html.
  • Probasco, Jim. “The Complete Guide to Money Market Deposit Accounts.” Investopedia, Investopedia, 11 Oct. 2020, www.investopedia.com/personal-finance/complete-guide-money-market-deposit-accounts/.
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