How to Find the Best Money Market Rates

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by: Hank Coleman
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Date: Mon, 14 Feb 2011 Time: 3:21 AM
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Money management consists of four basic principles: earning, spending, saving, and investing. While earning makes it possible to spend, saving makes it possible to invest. Thus, an essential part of any sound money management plan is savings. Apart from earning more than you spend, you must also save money for an emergency or for an investment. Moreover, you need to save for both short and long-term goals. A money market account is one way of saving, and it is important to know how to find the best money market rates.

What Is A Money Market Account?
A money market account is a special savings account offered by banks and credit unions. It offers a higher interest rate than a traditional savings account and is just as low in risk. It is designed to yield financial growth over the life of the account. Money market accounts are also known as money market deposit accounts. Many times, they are referred to by their first letters. So, you will hear someone refer to a money market account as an MMA or to a money market deposit account as an MMDA.

What Is The Difference Between A Money Market Account And A Basic Savings Account?
This is one of the first questions those interested in opening up a savings account ask when a bank or credit union representative asks them if they would be interested in considering a money market account instead of a traditional savings account. Aside from the fact that they both help you structure your savings goal, they are very different financial instruments. A money market account offers a much higher interest rate, which gives you a better chance for financial growth. You are required to maintain a higher minimum balance and to make fewer withdrawals with a money market account. Although a money market account is classified as a deposit account, you are permitted to write checks to withdraw funds. There is usually a restriction to the number of check transactions allowed within a certain timeframe. If the transactions exceed this allowable limit, a higher fee may be imposed on the account or it might even be closed down. Even more than a savings account, money market accounts are established to give banks reliability in their deposits for issuing new loans from those funds. Money markets thereby allow individuals to earn a higher interest on deposited funds in a low risk environment and these restrictions allow money markets to provide stable funding for bank operations and offer customers higher money market rates.

What Are Money Market Rates?
If your aim is to achieve maximum financial growth from a savings vehicle, than it is imperative that you find the best interest rates through careful research. Interest rates differ because banks are also in the business of attracting new deposits. Moreover, some banks offer tiered interest rates. This means the higher the account balances, the higher the interest rates. While there are, of course many ways to research anything, the quickest and most convenient way for someone to start getting serious about savings is to search online for money market rates. Apart from speed and convenience, an advantage to doing your research on the Internet is that you can compare up-to-date rate information from banks, credit unions, and other financial institutions side-by-side.

Overall, by doing online research on money market accounts, you can make numerous comparisons and review the different features available before arriving at a decision. A well thought out decision will go a long way in how much value you earn from your money market account. A good decision will help you achieve your financial objectives.

About the Author

Hank Coleman is the founder of several financial blogs, focusing on topics such as how to find the best money market rates and other profitable investing opportunities. He is an entrepreneur and professional in the government sector. Hank holds a Bachelor's degree in Business Administration, a Master's in Finance, and is currently studying for his Certified Financial Planning (CFP) credentials. Always looking for a trusted financial institution for advice and tips he tends to look up information at http://www.discoverbank.com more often than not.