Money Market Accounts
Money market accounts take you one step closer to actually investing your money, although you still enjoy the FDIC guarantee of up to $250,000 per account. Shop around for the best interest rates, and keep the following tips in mind:
- Money market accounts restrict your access to money by limiting the number of withdrawals and checks you can write each month.
- Additional charges may apply if you make additional withdrawals.
- If you continue to make more withdrawals than allowed each month, the bank may close your account.
- Minimum balances may be as low as $100.
- To avoid fees, you may need to maintain a minimum balance of anywhere from $500 to $2,500.
Money market accounts are a good place to keep three to six months worth of emergency cash on hand. You will earn a higher rate of return than with a traditional savings account, yet still be able to access cash when you need to.