Banks make it easy to invest in the money market. All you have to do is sign up for an online bank that offers an account with the top money market rates. They operate similarly to savings accounts, and just like with savings accounts, the best rates are going to be found with online banks.
The money market itself of course refers to the overnight swaps of huge amounts of money between the US government and financial institutions. The majority of the transactions are actually wholesale transactions that take place between the banks and companies. Ordinary investors can get involved simply by placing their money into a money market account offered by a bank.
The most important factor is to put your money in a financial institution where it will be backed by the FDIC, so that you won’t have to worry about losing any of it, as you would if you were investing in the stock market. The returns aren’t very high, but the risk is very low. You can still make profit as long as you choose a bank with a high APY.
Here are some of the online banks that offer top money market rates:
This bank is ideal for those who have a higher amount to invest. A “Platinum MMA” requires $5,000 at the very least. If you don’t have at least that much, then go with one of the other options below. Some of the perks offered by BMO Harris include being allowed to write checks from a platinum account or getting an ATM card. There are no monthly maintenance fees.
While the ongoing APY always varies, it’s currently around 0.50% to 0.75% with this bank, depending on the minimum amount you keep in your account. TIAA Bank offers a “Yield Pledge”, which maintains that whatever its yield pledge money market account rate is, even when it changes, will always be in 5% top money market rates percentile (as long as you keep at least $5,000 in). There are no monthly fees to worry about and the accounts are IRA-eligible.
This is the financial institution to choose for those who don’t have several thousand dollars to start with. Its current 0.99% APPY is compounded daily and paid monthly. Customers are allowed a maximum of 6 withdrawals per month and there are free transfers.
CIT Bank is often #1 in “top money market rates” lists – and for good reason. It only costs $100 to start a money market account, and the APY is always competitive. One of the perks is that you are guaranteed to “earn 11x the national average”. You won’t have to pay any service fees and you’ll have fast, easy access to the funds.