Money market account
A money market account is a type of savings account with relatively high interest rates.
A money market account is a high-interest, government-protected savings account typically offered by banks and credit unions. Although other companies may offer money market accounts, only those in banks and credit unions are insured.
Money market accounts typically have a minimum balance requirement, and many earn higher rates of interest for larger deposits. For example, an account holder may earn 1% for a $10,000 deposit, but 3% for a $50,000 balance. They also restrict the number of transfers or withdrawals allowed a month to six, and only three may be checks written against the account.
Money market accounts are ideal places to hold medium-term savings and emergency money, because they combine the liquidity of a passbook account with interest rates that approach those earned by certificates of deposit.
Related Fool Articles
- The Motley Fool's Saving & Spending Center
- Where to Park Your Cash
- Market? Mattress? Neither!
- Wanted: Safe Short-Term Investments
Recent Mentions on Fool.com
- How Twitter Inc. Lost to Instagram, and What It Can Do About It
- The Average American Is Just Plain Wrong on Social Security
- At Least One Middle Eastern Airline Giant Is Fueled by Subsidies
- Fewer Than 1 in 5 Americans Are Making This Smart Money Move
- Why a Stock Market Crash Can Be a Wonderful Thing
- The Best 529 Plans You Can Get