What is money market?
What is money market account – Money market is a part of financial market where short-term developments are being dealt with the help of financial instruments. For financial market, money market has become the most important module that helps in buying and selling the retreats of short-term developments of one year more or less, for instance treasury bills and commercial papers. Money market is basically a process of wholesale used by the participants in the manner of borrowing or lending the money for a short period of time.
Money market contains some negotiable instruments such as treasury bills, commercial papers and deposit certificates. Money market has a high usage by number of participants & companies who raise the funds by selling commercial papers in the market. Many companies and participants are preferred to use money market for investing purpose because of its good security. Money market & capital market are completely two different things. Since money market is for shorter duration whereas capital market is for a longer period of time and in money market it is easy to withdraw the money.
What do you understand by the term ‘Money Market Account?’
The term ‘Money Market Account’ refers to the financial instrument and it is an account of savings that comes with certain checking features. Money market has checks or debit card that comes with only limited number of transactions per month. Usually it also offers higher rate of interest as compare to the regular saving accounts.
Advantages of Money Market Account are;
- Money market account returns the larger rate of interest and it has easy access.
- It has accustomed account benefits and funds in money market account has lower risk as compare to other investment vehicles.
Money Market Account VS. Saving Account
- One of the major difference between money market account and saving account is totally depends on how you access your funds.
- Money market accounts mostly allow the person to withdraw money either through cheque, debit card or use ATM just like a checking account.
- In saving account, people have less usage of checks and they mostly have to withdraw through ATM.
- There is a difference between the typical interest rate of money market account and saving account. Basically there is flexibility of interest in both the accounts, sometimes saving account shows higher rate of interest whereas on other days money market account shows high interest rates.
Can someone lose their money in a money market account?
No, it is not possible to lose money in a money market account since they are protected by the ‘Federal Deposit Insurance Corporation’ and the ‘National Credit Union Administration’.
There are total five banks that has the best money market accounts and that are;
- Synchrony Financial with APY of 0.60%
- CIT Group Inc. with the APY of 1%
- Capital One Financial Corporation with 1% of APY.
- Discover with 0.85% of APY.
- Ally Bank with 0.50% of APY
This is the latest list and has been discussed in the month of July, 2020.
ARE MONEY MARKET ACCOUNTS WORTH IT OR NOT?
Money market account is considered as the best account because first of all it offers the better rate of interests with several number of withdrawal options. Since money market account have higher minimum amount that requires the maintenance of higher balance.
Here is a list of best money market account rates which is followed as;
- Highest money market account rate: CIT Bank with 1.00% APY.
- High money market account rate: Sallie Mae that has 0.99% of APY.
- High Rate: BMO Harris with 0.95% APY.
- High money market account rate: First Internet Bank with total 0.91% of APY.
- High rate: TIAA Bank: 75% APY.
What is the average rate of interest on a money market account?
Currently, the average rate of interest on a money market account is 0.11% as per the weekly survey of institutions done by ‘Bankrate’.
Whereas, the rate of interest on a money market account has grown in the past few years from 0.188% of APY in the year 2016 to 0.372% of APY in the month of January, 2020. Just like money market account, savings account has also increased and is averaged by only 0.272% APY.
What is chase money market account?
Chase money market account is offered by a bank known as ‘Chase Bank’. This bank was found in the year 1877 and it is a New York, NY based bank. But, Chase bank money market account is available across all the states of United States of America (USA).
MONEY MARKET INTEREST CALCULATOR
Money market interest calculator is a personal tool of finance which is available online used for calculating the final return on an opening deposit & series based on deposit per year only for a particular time period. If anyone wants to open their own money market account then you can and should not worry about anything because it is as best as the saving account is. The interest on market account is being credited & is compounded on the basis of month.
Money market interest is referred as an interest on the money which is deposited in the Money Market Account (MMA). Whatever the amount that amount that has been deposited is directly invested to the securities of government and corporate and depositor gets the interest on the basis of current rate of interest that is currently going on in the market.
What is money market account typical interest rate?
Typical interest rate of money market extracts the rate depending upon the balance available in one’s account and account with high balance has a tendency to earn at the higher rate only. Money market rates with average number usually comes between 0.08% APY and 0.11% APY that again depends upon one’s balance.
The typical interest rate on money market is compounded on daily basis and the payment is done per month. Best thing about compound interest is that bank itself pays interest to the person based on the money they’ve paid you the interest. Interest rates paid by money market accounts varies from bank to bank.
So, if you are thinking to have money market account then you should definitely go for it because it definitely makes a good place for storing the cash for emergencies, for major expenditures and for short-term goals as well.