Posted on March 27, 2010.
Money Market Account A money market account (MMA) is a kind of savings account offered by banks and credit unions. The difference between the regular savings account and money market account is that the MMA offers higher interest rates. However, the money market account requires a minimum balance higher than the regular savings account.
The important feature of MMA is that the money saved in the bank under this option is insured by the Federal Deposit Insurance Corporation (FDIC). With this insurance facility, you can ensure the safety of your deposit, even if the bank fails, you will not lose a single penny of your savings. The FDIC was formed in 1933 to save customers, especially those of failed banks.
money market account works the same way as does a normal account. You earn interest on deposits, and as you wish, you can withdraw money from him. However, there are certain limitations to the number of transactions per month, usually a MMA account, you can have three to six withdrawals and up to three checks a month. The bank will charge a service fee for any additional transaction from your account. Normally it is between $ 5 and $ 15 per additional check in a month. Also, you will be penalized if the account runs out of minimum balance under the terms of the bank. These service charges, however, may differ from bank to bank. It is recommended that you make a thorough study on the functioning of the MMA of different banks before choosing one for you, so you do not lose money in the form of heavy service charge.
Once you have joined an MMA, you will receive an account book in which you record your transactions clearly. At the end of each month, the bank will send you a statement of transactions by which you can check the account details. If you keep this race MMA properly, by maintaining a good credit history and transaction, you may benefit more from high-interest savings accounts than any other similar savings.
Some banks and credit unions offer a modified version of MMA. It is called high-yield money market investment account (HY MMIA). This is supposed to accounts that can keep the account balance reasonably higher. If your account balance exceeds a certain limit (often provided by banks), you can convert your MMA in HY MMIA. The MMIA HY offers interest rates as a percentage of account balance. Superior balance, the more your savings as interest. This kind of interest rate offered by HY MMIA is often referred to as "levels of interest rates. As with MMA, this account also allows you to withdraw money as needed.
In short, the money market account is a disciplined and effective cost savings. Also the participation of FDIA MMA is one of the safest forms of deposits by banks.
