Money market account is another savings account offered by banks. It is a deposit account with relatively high rate of interest compared to the savings account. The interest rates depend on the market rate. The interest rates also differ from bank to bank. The minimum balance to be maintained is higher than the savings account. Remember to open this account only when you have enough money to maintain the minimum balance, otherwise the penalty is high.
Money market accounts are ways to invest our hard-earned money fruitfully. Due to high rate of interest, you earn and save more money. These accounts allow you to withdraw money through checks. The banks generally restrict check withdrawals to certain number of times. The withdrawal limit varies from bank to bank. Due to restricted withdrawals you withdraw less and save more. This can be treated as a savings account rather than a checking account!
The advantage of having a money market account is that the interest rates are high and you can put your emergency funds. The more money you deposit higher will be your interest rates. It has easy access to your money. You can save money for large purchases with this account. Money market accounts are safe since they are insured by Federal Deposit Insurance Corporation. It means that even if your bank goes out of business the money deposited is safe.
Following are few points that you must remember when withdrawing amounts:
- Banks usually set limitations of money to be withdrawn.
- They restrict on number of withdrawals, service charges are applicable in case you cross the limits.
- You can take a survey and compare banks on the fees, maximum amount allowed to withdraw and the interest rates.
- Generally the bank will provide you with a register to keep track of your transactions. You need to make a note on the deposits and withdrawals to keep track of your balances.
- Banks will send statements to let you know of your deposits, withdrawals, interest earned and service charges applied if any.
Compare the available banks in the market for their deposit schemes and rate of interests. Check for number of withdrawals per month and the minimum balances. Choose a bank which suits your needs. Due to competition banks offer high rate of interests for more and more people to invest in them.
You simply make use of the money market account to deposit more and more money. With high interest rates your money will grow faster. Thus sit, relax and watch your money grow.