Money market management does not tend to be a complex process. This type of investment is, in essence, a savings account with a few additional restrictions and slightly more yield. Understanding the terms of the account and being vigilant of things such as fees, restrictions and policy changes are usually sufficient for successful money market management.
One of the best tips for money market management is to ensure that all account requirements are met so that additional fees can be avoided. This includes knowing and adhering to the minimum account balance and the maximum number of withdrawals per month. Investors can track these things via a money management computer program or by simply regularly updating the paper register that comes with most money market checks.
It also can be useful to know what restrictions and fees are attached to making deposits and withdrawals. Some funds charge a fee for all electronic transfers. Others might charge a fee for each transaction made when the account balance is below the required minimum amount. Many funds allow deposits from automated teller machines (ATMs), but there might be a fee for that service.
Another important element of money market management is to have a clear understanding of the purpose of the account. An investor should determine whether it is meant to be a place to keep long-term savings, emergency funds or money set aside for specific purposes. Understanding how the account is to be used can increase the ease of managing the investment and make it easier to determine what and when to invest and on what sort of a schedule withdrawals are best made.
Funds must inform their customers of any policy changes. By reading all literature from the company, an investor can maintain current knowledge of the best practices to follow in regard to money market management. This includes new fees, restrictions and other changes that might happen periodically.
Good money market management also includes steadily increasing the value of the account. The best way for a customer to do this is to make regular deposits. A typical fund will offer automatic monthly withdrawal from a checking or savings account.
Another aspect of good money market management is the periodic review of other available money market funds. This is done primarily to ensure that the interest rate is a competitive market value. If it is consistently lower than the market average, then it might no longer be a desirable fund in which to invest.
