What is insured money market account

Money market accounts can be used to save money for short-term or long-term needs. For example, you might consider opening a money market account if you:.

These are all good reasons to consider a money market account in place of a CD or savings account. And CDs require you to keep your money parked for a set period of time. Otherwise, withdrawing money from a CD early could trigger a penalty.

If you think a money market savings account is right for you, opening one is a fairly simple process. It starts with comparing different money market deposit accounts from multiple banks to find the right one. Depending on the bank, you may be able to do this online. Once your account is open and funded, you can manage it the same way you would any other bank account.

This means checking your statements or account activity regularly, setting up transaction alerts and linking it to your other bank accounts for easy transfers.

You may also be able to add money to your account via mobile check deposit or use person-to-person payment apps to transfer money to friends and family. You can protect your money market accounts and other online bank accounts by doing things like creating secure passwords, setting up multifactor authentication and avoiding the use of unsecured Wi-Fi networks to access your accounts.

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In addition to its money market account, CIT Bank offers two savings accounts. CIT Bank offers a wide variety of bank accounts, unlike some other online banks. Its deposit products include high-yield money market account, checking, savings and CDs. In addition to competitive rates on banking products, TIAA Bank also offers mobile banking and online tools. Perks: One of the biggest perks TIAA Bank offers is its "yield pledge," which adjusts the rate its pays on its money market account to ensure its among the top 5 percent of competitive accounts.

The account also has no monthly fee and allows for mobile check deposits. Overview: Synchrony Bank offers a money market account, a savings account and CDs. Perks: The Synchrony Bank money market account has check-writing privileges. You just need to ask the bank for checks once you deposit money into your account. Also, you can get an ATM card for your money market account. What to watch for: ATM fees outside of the U. Overview: Discover Bank is an online bank that offers a variety of products.

The best way to choose a money market account is to compare APYs and minimum balance requirements. If you want to physically walk into a bank and talk to a banker about your money market account, choose a bank that has brick-and-mortar locations.

An online bank may offer convenient customer service options through its phone availability, and it may have secure messaging on its website or mobile app. It may also allow live chats with a customer service representative on its website. A money market account is a type of savings deposit account that can be found at banks and credit unions. Money market accounts work like a savings account, where you can deposit and withdraw money into it.

You will also earn interest on the money you deposit into a money market account. Money market accounts generally let you withdraw money, but banks may limit withdrawals and transfers. Unlike most savings accounts, money market accounts may have check-writing privileges. You also might have a debit card and be able to access money at an ATM. High-rate money market accounts may pay a higher interest rate than traditional savings accounts, but their minimum deposit and balance requirements may be higher.

Money market accounts typically have a few advantages, including a high yield, check-writing privileges, and ATM access. They may have some disadvantages, though.

For example, some institutions might limit the number of withdrawals or transfers per statement cycle, and you may be able to find a high-yield savings account that has a higher yield.

Money market accounts might have a higher minimum balance requirement than a high-yield savings account.

But you should be able to find a money market account with no minimum balance requirement or a low one. This is especially true at online banks. Money market accounts may come with checks and a debit card, which distinguishes them from high-yield savings accounts.

The check-writing capability of money market accounts provides a degree of flexibility and liquidity often not found in other savings accounts. Like a traditional savings account , there's no set term for maturity with a money market account — you can park cash for an unlimited amount of time.

Keep in mind that you may be required to make a transaction every so often in order to prevent your account from going dormant. Check with your bank for its policies. That said, safety is still a top feature of these financial tools. Interest rates determine how much interest and income your money market account earns. When the Federal Reserve raises or lowers the federal funds rate, it tends to affect the yields on money market accounts.

When the Fed raises rates, savers with high-yielding accounts tend to receive higher APYs. From to , the Fed raised rates nine times. This helped many savers at high-yielding online banks earn substantially higher APYs.

But starting in , the Fed started lowering rates. In March , the U. This sent the federal funds rate down to zero — unwinding all nine of the past rate increases. These rate cuts have caused some banks to lower their APYs on savings accounts and money market accounts.

Interest is usually credited on a monthly basis on money market accounts. The APY on an account includes the effects of compounding during the year. So, when you compare APYs, you can tell which account is going to help your money grow the most. Always compare APYs and not rates. You can use our compound interest calculator to determine your potential earnings on a money market account.

Money market accounts typically credit interest monthly. The average interest rate on a money market account is currently 0. Yet some banks are offering about seven times that. That makes it crucial to shop for the best deal when you're searching for a money market account. It's important to remember that institutions can change their interest rates at any time, pushing returns higher or lower depending on the market. Most money market rates are variable, not fixed. That means the rate and APY you receive can rise or fall as market conditions change.

A fixed introductory APY is the exception. During the promotional period, the fixed yield gives you a certain APY for a specific period of time. An introductory rate may also require a deposit made with new money, which usually must come from outside the bank.

Since money market rates are expected to stay relatively steady in , a high introductory rate might be something to consider. Check to see how competitive the ongoing APYs are in order to get a sense of whether your yield after the introductory APY expires will still be competitive. The tool may also help you realize if multiple banks use the same FDIC certificate. Anyone looking for a safe place to stash a good chunk of money and earn some interest may benefit from a money market account.

But these accounts make particularly good sense in a handful of situations. For example:. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.

Compensation may factor into how and where products appear on our platform and in what order. But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates. Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can. And it almost always offers higher-than-usual interest rates as an annual percentage yield than savings and checking accounts.

The downside is that with a money market account, you only get six transactions transfers or withdrawals per month, or per account cycle of at least four weeks.

Develop and improve products. List of Partners vendors. Your Money. Personal Finance. Your Practice. Popular Courses. Banking Money Market Account. Table of Contents Expand. What Is a Money Market Account? Understanding Money Market Account. Money Market Accounts vs. Money Market vs. Checking Accounts. Mutual Funds. Alternatives to Money Market Accounts.

Key Takeaways Money market accounts are offered by banks and credit unions. They generally pay higher interest rates than regular savings accounts and often come with debit cards and limited checkwriting privileges. Many banks also offer high-yield or high-interest checking accounts, which may pay better rates than money market accounts but impose more restrictions.

Pros Higher interest rates Insurance protection Checkwriting privileges Debit cards. Cons Limited transactions Fees Minimum balance requirement. Article Sources. Investopedia requires writers to use primary sources to support their work.

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A checking account is a highly liquid deposit account held at a financial institution that allows deposits and withdrawals. What Is the Money Market? The money market refers to trading in very short-term debt investments. These investments are characterized by a high degree of safety and relatively low rates of return. A certificate of deposit CD is a bank product that earns interest on a lump-sum deposit that's untouched for a predetermined period of time.

What Is an Uninsured Certificate of Deposit? An uninsured certificate of deposit is a CD which is not insured against losses.