Money Market Account

Money Market Account
A money market account (MMA) is​ a​ kind of​ savings account offered by banks and credit unions .​
The difference between the​ normal savings account and the​ money market account is​ that the​ MMA offers higher interest rates .​
However,​ the​ money market account requires a​ higher minimum balance than the​ normal savings account.
The important feature of​ MMA is​ that the​ money saved in​ the​ bank under this option is​ insured by the​ Federal Deposit Insurance Corporation (FDIC) .​
With this insurance facility,​ you can ensure the​ safety of​ your deposit; even if​ the​ bank goes bankrupt,​ you will not lose a​ single penny from your savings .​
The FDIC was formed in​ 1933 with a​ view to​ save the​ customers,​ especially those of​ the​ failed banks .​
Money market account works in​ a​ similar manner as​ a​ normal account works .​
You earn interest for your deposits,​ and as​ you wish you can withdraw any amount of​ money from it .​
However,​ there are certain limitations for the​ number of​ transactions in​ a​ month; usually an​ MMA account enables you to​ have three to​ six withdrawals and a​ maximum three checks a​ month .​
The bank will charge you a​ service fees for any extra transactions from your account .​
Normally it​ is​ between $5 and $15 per extra check in​ a​ month .​
Also you will be penalized if​ your account runs short of​ the​ minimum balance as​ per the​ terms of​ the​ bank .​
These service charges,​ however,​ may differ from bank to​ bank .​
It is​ advisable that you do a​ thorough study on​ the​ operation of​ the​ MMA of​ different banks before selecting the​ one for you,​ so that you don’t lose the​ money in​ the​ form of​ hefty service charges.
As soon as​ you join an​ MMA,​ you will be issued an​ account register,​ in​ which you will record your transactions clearly .​
At the​ end of​ each month,​ the​ bank will send you a​ statement of​ the​ transactions,​ by which you can verify the​ account details .​
If you keep this MMA run properly,​ by maintaining a​ good credit history and transactions,​ you are likely to​ benefit more from the​ high-interest savings than any other similar savings accounts .​
Some banks and credit unions offer a​ modified version of​ MMA .​
It is​ called the​ High Yield Money Market Investment Account (HY MMIA) .​
This is​ meant for accounts that can keep reasonably higher account balance .​
If your account balance is​ above certain limit (often stipulated by the​ banks),​ you will be able to​ convert your MMA into HY MMIA .​
The HY MMIA offers interest rates in​ proportion to​ the​ account balance .​
Higher the​ balance,​ higher is​ your savings as​ interest .​
This kind of​ interest rate offered by HY MMIA is​ often referred as​ ‘tiered’ interest rates .​
As in​ the​ MMA,​ this account also allows you to​ withdraw the​ money as​ per your requirements .​
In short,​ the​ money market account is​ a​ disciplined and efficient way of​ saving money .​
Also the​ involvement of​ FDIA with MMA makes it​ one of​ the​ most secure forms of​ deposits through banks.

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