Comprehensive Guide to Money Market Accounts and Their Yields
This article offers a detailed overview of money market accounts, highlighting how they work, their benefits, and top options from 2018. It emphasizes comparing rates and minimum deposit requirements to choose the best account for individual savings goals. The article explains the importance of APY and how it impacts earnings, helping readers make informed decisions about their financial options and maximize returns on their investments.
Understanding Money Market Accounts and Their Interest Rates
A Money Market Account (MMA) is a savings vehicle that combines features of checking and savings accounts. It limits the number of withdrawals or checks you can make each month while offering a competitive interest rate known as the annual percentage yield (APY). Although the minimum balance requirements for MMAs are typically higher than standard savings accounts, they often provide higher interest rates. The interest, compounded regularly, boosts your savings more effectively over time.
Is a Money Market Account right for you?
Not everyone finds MMAs suitable due to transaction restrictions. However, if occasional withdrawals and higher yields are important, an MMA can be beneficial. When choosing the best account, it's essential not to select solely based on the offered APY. Consider the pros and cons, including minimum balance requirements, which, if not maintained, might incur penalties. Carefully compare different banks' offerings to find a balance between attractive rates and manageable conditions.
Top Money Market Accounts in 2018
To maximize earnings, select accounts with competitive rates and affordable minimum balances. Rates vary across institutions and may come with slightly different terms. Generally, higher APYs result from daily or monthly compounded interest, credited quarterly. Before opening an MMA, compare offerings to ensure favorable rates and manageable balance requirements. In 2018, VirtualBank led with a 2.01% yield requiring just a $100 minimum deposit. Other notable options include All America Bank and Redneck Bank, both offering 2% APY with $500 minimum balances. Keep in mind that interest rates fluctuate based on market conditions.
