EARN MORE WITH A MONEY MARKET ACCOUNT

2007-03-08 10:33:40

( Financial )



You've worked hard and set aside a little money for a rainy day. Want to put your money in something more rewarding than the usual savings and checking accounts? Why not set up your own money market account

Why money market accounts?

A money market account is similar to a savings account, but it earns more - Money market account rates are higher because your money is invested in safe and conservative short-term investments such as government T-bills, savings bonds and certificates of deposits. Yet, you can easily access and withdraw your money as compared to other higher-interest investment products. Some banks allow you to make up to six withdrawals, or to write three checks every month.

A money market account is a safe place to keep your money - Thinking of investing in higher risk investments, but wary of losing your shirt? A money market account allows your money to earn income until the time you decide to try your luck in the stock market. You can also use the higher money market account interest rates to build up your emergency fund or to save for your kids' college education. Money market accounts are also protected by the Federal Deposit Insurance Corporation (FDIC), up to $100,000, so even if the bank goes belly up, your money will still be there.

Finding the best money market accounts

Look before you leap - Almost all banks have a money market account program. Some might even have high yield money market accounts or high interest money market accounts. Shop around first before deciding what the best money markets are for you. Compare money market account interest rates. Look at the best terms and yields available. You can look for information online or visit several banks and ask for information.

Decide what features are important to you - Is it important that you be able to withdraw several times a month? What minimum account balance can you comfortably afford? Keep these in mind while deciding on the best money market accounts for you.

Read the fine print - be aware of the fees charged if you withdraw more times than the set limit or if you go below your minimum account balance. Make sure that the money market account rate quoted to you is permanent and not a short-term promotion, and that your bank is FDIC-insured.

Want to build a little nest egg? Saving up for your dream home? Savings and checking accounts are not your only alternatives. Think a little "out of the box" and get a money market account!


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