A money market account also known as a money market deposit account are types of bank deposit accounts which can hold onto your extra cash and then give it back to you with extra money added in the form of interest. It is not a typical financial account and the interest rates for the account are based on the money market of the country. These are the ones with high interest rates and a high minimum initial balance in the list of short term investments Australia. Usually money market accounts have a limited number of checks that can be written annually but it not will be added to your limit of withdrawals through ATM, tellers and other types of transactions.
• Your money will be there even if investee goes bankrupt
Money market accounts are insured by a federal and governmental corporation in most countries so it will give your money the safest place to stay on Earth as even if the bank or the credit union goes belly-up in bankruptcy, the deposit is safe.
• Compounded interests – more money every year!
These accounts usually have a compounded interest rate that is done daily or monthly sometimes. So once your interest is calculated and added to the principle, your interest keeps going up. You can figure out which banks want those MMAs more than any other by the high rates of interest.
• Withdrawing is a problem
The basics of a MMAs and MMDAs work like those of a savings account which allows withdrawals, but only to a finite amount. If you exceed the limit of withdrawals the bank can charge you fees for not maintaining the account balance. You can choose a bank on your requirements of fees and services, minimum balance requirement and interest rate as different bank vary on their offers. Some banks even extend liquid investment alternatives that allow you to take your money out in different asset vehicles. So if there is an emergency and you need the cash, it is not like one of the short term investment options, there is a chance for you to take out only some of the money.
• Various account types
There are different types of MMAs and MMDAs that you can open; but this also depends on what your bank is giving out. There are individual, joint, sole proprietorship, partnership and company types of accounts that can be opened usually. So if you can find someone to scrounge up a part of the initial minimum balance then you can go for the joint account option. If you have a significant amount of money that is sitting on a checking account and not even making revenue by getting interests, then money market account is a way for you to put that surplus into work.