A “money market account”, or MMA, is a low-risk savings solution offered by credit unions and banks. Unlike with personal savings accounts, banks can actually invest the money from MMAs in other places such as bonds and CDs. The places they invest in are very low-risk, making the investment from the customers purchasing the MMA very low-risk itself. Investing in the top rated money market accounts is worthwhile since you will receive a better interest rate than you typically would with a savings account.
People open a money market account for a variety of reasons, with the most common being because they wish to build an emergency fund. It’s a good choice for those who want low-risk savings and only need moderate access to their cash. The minimum requirement to open the account can be as low as $100, depending on the bank. Online banks can offer more flexibility than a traditional bank. With the top rated money market accounts, the customer will benefit from the bank’s high interest rates. Look for a high yield deposit account with a reasonable minimum deposit.
It’s important not to mix up money market accounts with money market funds. The latter is a type of investment with a fluctuating rate of return and is not FDIC-insured. An MMA, on the other hand, DOES have FDIC protection. An MMA also has its pros compared to a CD or other long-term investment, as it allows withdrawals, although there is usually a limit of how many pre-authorized withdrawals and transfers per statement cycle.
Top Rated Money Market Accounts Fees
Do research on various online banks to see what kinds of fees are associated with MMA accounts. The best banks are the ones that do not charge any fees for opening an account or for monthly services.
An MMA account is a great way to get started with investing. You won’t have to worry about managing the daily moves. The bank will take care of everything for you – all you have to do is sit back and let the money grow. The returns probably won’t be as high as if you were successfully investing on your own, but if you don’t have much experience with investing anyway, this is a better option, as it is safe and secure. Money market accounts still offer better interest rates than regular savings accounts.
Where can you find the top rated money market accounts? It’s recommended that you start with CIT Bank. This online bank only has a minimum deposit requirement of $100 and charges no fees. There is an annual percentage yield of 1.85% for all accounts.