Money Market Accounts: Passively Earning

2007-03-08 10:33:40

( Financial )



SUPER-SIZE SAVINGS

Money market accounts are special types of savings accounts offered by banks and other credit organizations. Money market accounts are very similar to an ordinary savings account except that money market account interest rates are significantly higher.

If you want to open a money market account and take advantage of the high savings rate, you have to know several important details about money market accounts. There are several requirements for money market accounts to keep earning its high interests. First, a money market account requires a bigger initial deposit and a higher maintaining balance.

Money market accounts include a checkbook that you can use. But keep in mind that a money market account has restrictions on how many withdrawals can be made against it. Depending on the bank, withdrawals are usually limited to three to five a month. The bank will charge you a fee if your go over the cap on withdrawals.

IDLE BUT PRODUCTIVE MONEY

Money market account interest rates vary greatly from bank to bank. Some banks will offer higher interest rates to lure more people into opening an account with them. Banks will also differ in the required initial deposit and minimum balance.

However, banks will generally give higher interest rates for accounts that have more money in them. This only stands to reason because the more money is in the money market account, the more money the bank can use as capital for lending.

The best thing about money market accounts is the stability. And because savings accounts are insured, there is virtually no risk on your part. If the bank closes down, you will get your money back.

The key to earning more in a money market account is to make sure that you regularly set aside money for deposit into the account. After some time, you will be surprised at how much you have already earned.


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