Money Market Accounts

A Money Market Savings Account

By August Holcombe

An absolutely safe way to store $100,000 of your Money in the bank that pays a nice yield is in a Money Market Savings Account, also known as a Money Market Deposit Account. They are insured up to $100,0000 (if a retirement account, up to $250.000) by Federal Deposit Insurance Corporation if in a bank and if in a Credit Union by National Credit Union Share Insurance Fund. With a spouse you can also have a joint account also insured.

With your Money Market Savings Account or Money Market Account, there is a minimum balance, but the money market account pays about twice the interest rate that a Passbook Savings Account or a Statement Savings Account pays. The rates are set by the bank or credit union to reflect the directions of overall interest rates and can change on a daily basis although most banks change only weekly. The money market savings account has advantages of liquidity, security, and accessibility. You don't have to worry about the vagaries of the stock market, about price/earnings of different companies, about income statements, and balance sheets. No second guessing is required - Should I have gone to large income producing stocks or small-cap stock or midsize-cap stocks, should I invest internationally, or domestically? Or should just go gamble a lot of loot on Junk Bonds.

Unlike the other money making funds of stocks, bonds, or mutual funds which invest in stocks, bonds, commercial paper, REITs ( Real Estate Investment Trusts) mortgages, Treasury Bills or Corporate Bonds, you can be assured if you have the protection in knowing if you should need the money in the bank, it will be there. If you have more to invest than the insured amount you can open up new accounts at other banks or credit unions. which are then insured up to $100,000 or if a retirement account up to $250,000.

You may wish to consider using one of the large online banks and make deposits in you Money Market Savings Account through cyberspace. You can find online banks advertised on various money and financial websites.

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