Before you try to choose a money market savings account, you should understand what it is. A money market savings account is not simply a standard savings account with better interest rates. It is an account that allows people to invest their money in a professionally managed fund. This type of account commonly has more rules than a standard savings account. Considering how those rules will work in accordance with your plans is a good place to begin.
If you are not careful, you could find that a money market savings account is very expensive. Many standard savings accounts allow you to conduct many transactions at no cost. Most money market savings accounts are not this way. If you are planning to make numerous deposits or withdrawals during the term of your account, you should carefully consider the transaction regulations.
Some money market savings accounts will only allow you a small number of free transactions. Thereafter, the fees associated with deposits and withdrawals can be substantial. In some cases, you will not be allow to exceed a certain number of transactions even if you are willing to pay fees.
When considering transaction details, you may also want to investigate the required minimum balances. It can be disappointing to find out that withdrawing your money is free but that the amount that you need is still inaccessible because it will not leave enough to cover the minimum balance. If you suspect that you may need a large portion of your money, it will be best to choose the money market savings account with the lowest balance requirement.
Maintaining a specific balance may be less of a problem than forgoing the amount that you need to open the account. Opening a money market savings account generally requires a minimum deposit. You may want to compare these minimums so you do not have to stress your finances by placing money into the account you hadn’t intended. Instead, find an account that has an opening deposit you are comfortable with.
One of the most important things that you will need to consider is the return on investment. This is the amount you will get for keeping your money in the account. The rates can greatly vary from one financial institution to another. Instead of just mindlessly opening an account, you should try to get the best rates with the most accommodating regulations.