May 23, 2018

How to Earn More Money with a Money Market Account

Money Market AccountsThough money market accounts do not have as much liquidity as a standard savings account, they do usually have higher rates of interest. And even though they have a few more restrictions and limitations tacked on, many people are finding them to be a great choice for investment. Typically money market accounts do better with investors who have higher balances and who don’t need to access their account as much, but really they can be beneficial for anybody.

Basic Aspects

To gain highest reward from money market account interest rates you really have to understand what is involved with opening an account. Below are four basic aspects of a money market account:

  • Minimum deposit – Opening an account requires a minimum opening deposit, and this amount can range anywhere from five hundred to a few thousand dollars. It really just depends on the bank or lending institution you choose because they are all slightly different. The standard range is usually somewhere between a thousand and twenty-five hundred dollars, though the accounts with the highest return yields can require as much as ten thousand.
  • Minimum balance – There is also a minimum balance that money market accounts require you to have, and again this can vary from lender to lender. Dropping below the minimum will incur penalty fees on the account, so be sure to at least stay above this so as not to ruin the interest you are earning.
  • RestrictionsMoney market accounts come with restrictions on how often you can do a transaction. The common allowance is three to six withdrawals per month, and some banks will also provide you with checks which can be used in such transactions. Though there are limitations on withdrawals, deposits have no such restrictions.
  • Interest rate – Interest rates, the most highly sought after factor in a money market account, can change depending on your balance. To maximize your results make sure you choose an account that comes with a competitive annual percentage rate for the sum of money you plan on keeping in the account.

More Benefits

Money market accounts are a wise choice for investors who want to earn some interest on their investment but who also want to be able to access their funds without incurring penalties. Compared to other investment options, MMAs offer better interest rates than savings accounts and are more flexible than standard certificates of deposit. Another bonus is that money market accounts, unlike the money market funds that people usually get them confused with, are insured by the Federal Deposit Insurance Corp for up to $250,000.

Conclusion

Make More MoneyTired of your money just sitting in a savings account when it could be earning you better interest? Money market accounts offer a great alternative to prudent investors. The main thing is that you want to figure out ahead of time how much money you can invest without having to dip below the minimum balance when unforeseen circumstances arise. You should also take the time to compare different lenders to guarantee that you are getting the very best rates of interest and the most out of the terms and conditions.