Money Market Accounts

A money market account is a type of savings account that is offered by credit unions and banks just like normal savings accounts. The difference is that they will usually pay higher interest, have a higher minimum balance requirement, and only allow about three to six withdrawals per month. Money market accounts will let you write up to three checks each month only.

Your money in a money market account will still be insured by the FDIC like a regular bank account, which means that even if the bank or credit union goes out of business you’ll still be able to get your money. The FDIC or Federal Deposit Insurance Corporation is an independent agency of the federal government that was created in 1933 because many banks had failed in the 1920s and early 1930s. No person has lost money in a bank or credit union that was insured by the FDIC since it began.

Interest on money market accounts is compounded daily and paid monthly usually. The great thing about compounded interest is that the bank will be paying you interest on the money that they’ve paid you in interest! Interest rates paid by money market accounts can be different from bank to bank because some banks will try harder to get people to open a money market account with them than others