There are many options for keeping your money safe and earning a little extra from interest. Like a savings account or CD, a\u00a0money market account (MMA)<\/strong>\u00a0is a way to earn interest on money that you deposit at a bank or credit union.<\/p>\n An MMA could be seen as a happy medium between a savings and checking account. That\u2019s because an MMA offers the ease of a checking account and the earning potential of a savings account\u2014in other words, high interest rates and accessibility. In fact, an MMA will usually offer higher interest rates than a typical savings account. This means that you can earn more in interest on the same amount of deposited money.<\/p>\n One of the biggest benefits of an MMA is that you usually have easier access to your money than other savings accounts. Money market accounts will often come with checks, a debit card, or an ATM card, meaning that you don\u2019t need to transfer money to a checking account before making payments or purchases. This makes it easy to use your MMA when you\u2019re in a bind or need quick access to more money than is in your checking account.<\/p>\n But an MMA doesn\u2019t work exactly like a checking account. There are almost always limits on the amount of\u00a0transactions<\/strong>\u00a0that can take place within a specified time period (generally between 3 and 6 in a month). These transactions can include certain transfers, payments, and other ways that you access your money. When that limit is reached, you can face penalties or fees for additional transactions. If you\u2019re considering an MMA, be sure to check with your bank or credit union for specific regulations.<\/p>\n To go along with a higher interest rate, an MMA will often require a bigger initial deposit when it\u2019s opened. The\u00a0minimum required balance<\/strong>, or amount of money that must remain in the account if you want to avoid fees, is also often higher. This can make it more difficult to open and maintain an MMA than a traditional savings account with a lower threshold.<\/p>\n While they may have similar names, a money market account and a\u00a0money market fund<\/strong>\u00a0are not the same thing. A money market fund is a type of mutual fund, or a form of investment shared between multiple people. Investors purchase sections of the portfolio, or total amount, called shares. Money market funds generally focus on short-term, relatively low risk investments. But beware, unlike a money market account that functions like a savings account, it\u2019s possible to lose the money you invest in a money market fund.<\/p>\nA Happy Medium<\/h2>\n
Easy But Limited Access<\/h2>\n
Higher Thresholds<\/h2>\n
Fun But Not a Fund<\/h2>\n
This article has been republished with permission. View the original article:\u00a0Money Market Accounts<\/a>.<\/h6>\n