Friday, 10 August 2012

Money market account features

Money market account features

Money market accounts should not be confused with money market funds. A money market account is a type of bank account that imposes a set of restrictions on the number of allowable transactions. However, you need not worry about these restrictions since money market accounts often pay out higher yields than regular savings accounts.

If you are looking for a higher return on your investment, a money market account can be an attractive choice. Most money market accounts require low opening balances. If you choose a low-balance money market account, the return can be slightly higher than the rate offered by statement savings accounts. If you want a significantly higher interest rate, maintain a high balance on your money market account.

Serious investors can rely on getting high returns on a money market account and use the funds for small business insurance. Investing in savings accounts can cause a downshift in your portfolio. Aside from a better yield than savings accounts, money market accounts are more flexible too compared to certificates of deposit. Flexibility is an added advantage of money market accounts along with offering competitive rates. You can put your funds in a money market account anytime you wish. You can also withdraw your funds as often as three to six times within a month


Money market account features 
Money market funds are different from money market accounts. Although they have almost the same names, the nature of investment is totally different. A money market fund is a type of mutual fund. As an investor of money market funds, you will be investing in extremely short-term debt. The term is even shorter than bond funds. The law requires that the average maturity of investment tied up in a money market fund should not exceed 90 days. A shorter period of investment is usually safer for most investors. Considering money market funds are better than short-term bond funds.

Investing money market funds can be quite risky for investors since money is not insured. Unlike money market accounts, you invest in short-term debt. However, investors are compensated with slightly higher returns than money market accounts but the yields are not yet guaranteed. Before you invest in money market funds, you should be aware that all mutual funds deduct certain expenses and fees from your returns. This is why investors are recommended to look for the cheapest money market funds to take home higher returns.

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