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Money market accounts differ from savings accounts mostly because
they give you greater access to your money and require a higher
balance. The balances can be quite high. In many cases they can
be greater than $5,000.
Traditionally money market accounts provide a higher interest rate.
The online world is slowly offering money market accounts as well.
We're starting to see greater rates on these accounts. I anticipate
to see this trend continue.
Money market accounts do have a catch. Most banks allow for a maximum
of three to six withdrawals per month. You can make more than six
withdrawals, but will incur a penalty. Balances that fall below
the minimum are also charged a nominal fee of $5-$10.
Money market accounts allow you to write checks. Also the new online
rates have been one third to one half percent greater than online
savings accounts. Money market accounts are insured by the Federal
Deposit Insurance Corporation (FDIC).
I foresee money markets making a greater play online in the coming
years. Money markets are very valuable to people who do not access
their money more than four times per month. Money markets are also
very attractive due to the check writing feature.
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