What is a Money Market Account?
If you are looking for ways to start saving and at the same time earning a bit of a return on your hard-earned money, you may want to investigate Money Market Accounts. Most banks offer this type of account, which yields higher interest rates than typical savings accounts do.
Also known as an MMA, a Money Market Account is simple to open and is generally insured by the FDIC like most bank accounts, up to $100,000. The main difference between a Money Market Account and a regular savings account is that the former pays nearly twice as much interest as the latter.
Of course, there are certain restrictions when it comes to withdrawals. While you will be allowed limited access to your money, a Money Market Account is not quite as liquid as a regular savings account. It may also require a larger minimum deposit than the typical savings account.
Besides banks and other lending institutions, Money Market Accounts are also available through large corporations. While these accounts offer much higher interest rates than most banks do, they are also more risky. The FDIC does not usually insure this type of account, so if the company goes bankrupt, you will lose your money.