How to Get the Best Money Market Rates By Jess Hall HL

Traditionally, if you wanted the best money market rates, you only had the limited options of your local bank or a few national banks. Today, with online banking and shopping comparison sites, you can find money rates from a host of banks across the nation. Because of this fierce competition, banks are trying harder than ever to earn your business. Here's how to use this knowledge to your advantage to get the best money rates.
How Money Market Rates are Determined
Money market accounts are essentially turbo-charged savings accounts. You earn approximately the same interest rate, and you can write a limited number of checks from them. While returns for money accounts aren't as high as with certificates of deposit (CDs), it is a trade-off of convenience. With CDs, your money is saved with the bank for a limited period of time, with a penalty for early withdrawal. This lowers the bank's risk when lending money. With market accounts, you have the freedom and flexibility to withdraw money whenever you need to, so the bank gives you less interest accordingly.
Shopping for the Highest Money Market Rates
Like CDs, money market rates change on a daily basis. There's no set formula and no clear all-time winner when it comes to finding a bank that provides the highest rates. Fortunately, banking rate comparison sites let you compare current market rates between banks, while giving you details on specific terms such as how many checks you can write or what minimum balance (if any) you need in your account before you're charged a monthly fee. In many cases, you can invest as little as $1,000, and as long as you don't dip below that amount, you won't be charged the monthly fee. Because of the nature of market accounts, there's a legal limit set on how many checks you can write in a month.

Going Beyond the Best Rate
While the highest return rate is enticing, you should also look at the stability of the bank itself. Is the money account FDIC insured? How many checks can you write during a month? What's the minimum deposit amount? Like with CDs, the more you're willing to invest, the higher your rate will go. The best market rates are available to those who invest $100,000 or more in a money market account.
Money Market Account or CD?
Because they're so similar, people often ask if their money would be better invested in a market account or a CD. If you don't need access to your funds for a set amount of time, a CD will pay a higher rate. If, however, you need the flexibility of writing checks, instant access to the funds you deposit, and the competitive interest rate of a savings account, a market account is a better choice. Overall, a market account is a safe, low-risk way to invest your funds while giving you the freedom to access your money when you need it.

Jess Hall writes out of Jersey City about different investment opportunities, including how to get the best money market rates. Always looking for a trusted financial institution for advice and tips she tends to look up information at http://www.aurorabankfsb.com more often than not.

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