Guide to Money Market Accounts
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What Is a Money Market Account?
How Do Money Market Accounts Work?
Pros and Cons of Money Market Accounts
You can earn interest on your money Money market accounts usually pay higher APYs than standard savings accounts. Deposits are insured The FDIC and NCUA insure money market accounts from banks and credit unions respectively. Debit card and checks Money market accounts often offer a debit card and/or paper checks, making it easy to access your money once you’ve reached your savings goal.
Initial deposit and balance requirements Money market accounts generally require a large initial deposit and may also impose a relatively high minimum balance requirement to earn the advertised rate and/or avoid a fee. Lower yields than other bank products You may be able to get a higher APY with a high-yield savings account or certificate of deposit (CD). Withdrawal restrictions Money market accounts, like savings accounts, aren’t meant for daily transactions. Withdrawals or payments by debit card, check, or electronic transfer are usually limited to six per month. (ATM and in-person withdrawals are unlimited.)
Money Market Accounts vs. Savings Accounts
Money Market Accounts vs. Checking Accounts
Money Market Account vs. Certificate of Deposit (CDs)
How are Money Market Accounts and Money Market Funds Different?
Interest rates Money market funds typically offer a slightly higher return than a money market account. Accessibility Unlike a money market account, investors don’t have access to money market funds through debit cards or check-writing privileges. There is also typically a delay between making a withdrawal from a money market fund and having funds arrive in your bank account. Safety Since money market funds are investment products, they’re not insured against loss by the FDIC or NCUA. Though these funds are considered low risk, your investment could lose money.
Choosing a Money Market Account
Frequently Asked Questions
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