Money market accounts are a great way for consumers to benefit from higher interest rates without taking on the risks associated with investing in stocks or bonds. Money in a money market account is insured by the Federal Deposit Insurance Corporation (FDIC) just like a normal savings account, which means that even if the bank goes out of business, the government guarantees that you will receive the money you had in your account. A money market savings account is the safest way to make a guaranteed return while still being able to withdraw your money.
There are many things to watch for when opening a money market savings account:
- Pay attention to the number of withdrawals you can make and be sure it is a number that you are comfortable with. Money market savings accounts are not intended to be your primary checking account; rather, they should be an account that you dip into a few times a month to get extra money.
- Pay attention to the minimum required balance and be sure it is also a number you are comfortable with. Unlike many standard savings and checking accounts, money market savings accounts require a higher minimum balance. If you are short on cash, this may not be the best option for you. » Read more: Choosing a Money Market Savings Account
