Money Market Account

Money Market
Account

Ty’Shannah Cornelius &
Keldric Parks

Overview

A money market account works by having money
invested like a savings account but getting the interest
rates that are in the current money market. It usually
requires a higher investment than a regular savings
account.

Requirements

Money market accounts are offered at traditional and
online banks and credit unions. They have both
advantages and disadvantages compared to other types
of accounts. Their advantages include higher interest
rates, insurance protection, and checkwriting and debit
card privileges. Potential disadvantages include limited
transactions, fees, and minimum balance requirements.

Why It's A Good Option

● Higher Interest Rates Than Saving Accounts
● Insurance Protection
● Check Writing Privileges
● Debit Cards

Why It’s May Not Be The Best Decision

● Limited Transactions
● Fees
● Minimum balance requirement
● High-risk money market fund holdings can lose

value in volatile market conditions or if interest rates
drop, but they can produce more income.

Money Market Accounts vs. Savings
Accounts

Unlike money market accounts, regular savings
accounts typically have no initial deposit or minimum
balance requirements. They also pay interest, although
usually not as much as a money market account. Like
money market accounts, passbook savings accounts are
FDIC- or NCUA-insured. Both also restrict depositors to
six transfers per month, with certain exceptions.

Money Market Account vs. CD

A certificate of deposit is like a savings account with a
fixed duration, such as three, six, nine or 12 months, or
multiple years up to 10. In exchange for locking their
money, depositors get a higher rate of interest than they
would with a savings account. However if they withdraw
their money early, they'll pay a penalty. Some CDs don’t
penalize depositors for early withdrawals but pay a
lower rate of interest.