What is Money Market account?
A money market account (MMA), also known as a money market deposit account (MMDA) or money market savings account, is a special type of account offered by some banks and credit unions. Money market accounts are federally insured by the Federal Deposit Insurance Act for banks or the National Credit Union Association for credit unions.A depositor is limited to 6 or fewer transfers and withdrawals per month, according to the Federal Reserve’s Regulation D does not include withdrawals by ATM, in person, by mail, messenger, or telephone check . Like a savings account, Money Market account(MMA) pay interest, but typically require a high minimum balance to avoid fees. Some money market accounts allow you to write checks on the balance.
Money market accounts vs. alternatives
Most savers will be primarily concerned with the yield an account may offer. Bankrate.com found that money market account rates perform better on average than savings accounts as well as very short-term CDs. The higher yield doesn’t come without certain requirements, however. The average minimum balance required for a money market account is much higher than any of the alternatives.
Invest in Money Market account.
There are a few factors to consider when shopping for a new money market account, including the account’s rate, minimums, accessibility and perks. By doing some homework before you open an account, you can maximize the chances that you’ll find a vehicle that suits your needs for years to come.