Money Market vs CDs
Money market deposit accounts and mutual funds are a safe place to park your cash for a short period of time.
Money Market Deposit Accounts Money market deposit accounts are a cross between a checking and a savings account.
They earn a bit more than bearing checking accounts, but restrict the number of deposits or withdrawals that can be made each month.
click long as the balance in the account remains below the insurance limit, every bit of market money deposit account interest earned on the account is 100% guaranteed.
To learn more about how your money is protected by the FDIC, read Like most safe investments, they won't make you rich.
The rate of return paid on the accounts varies according to market conditions and the bank's standard rates, but in today's market, is usually only a tad higher than standard savings account rates.
By and large, they generally pay a bit less than the rate of inflation.
Money Market Mutual Funds Money market mutual funds are offered by investment companies.
They are investment pools that buy safe, short-term securities, such as Treasury bills, certificates of deposit, and commercial paper.
Commercial paper is an IOU issued by a company that needs money in the short term to finance accounts receivable, inventories, or other short-term needs.
Money Market Fund Values The income earned on money market mutual funds will vary based on the performance of the underlying investments.
But, because these investments are market money deposit account safe, they don't pay high returns—although the yields are a bit higher than on money market deposit accounts.
Beware of Money Market Funds Offering a High Return If a money market fund's return is a lot higher than that of a deposit account, take a closer look.
A high return on one of these funds could mean the investment manager is doing something fishy, making the fund less safe than average.
Use Money Markets For the Short-Term Both money market deposit accounts and money market mutual funds are simply places to keep your money for the short term.
They are not good places to put your money for long-term investment.
Because they earn so little, parking long-term assets in a money market guarantees market money deposit account lose buying power to inflation.
Which Money Market is Best for You?
To decide which type of money market is best for you, consider your reasons for setting this money aside.
click here market deposit account.
If you plan to use the fund to handle emergencies, or near-term bills, you might be best off with the money market account, where check writing is likely to be as seamless as it is at your local bank, so long as you make no more than the allowed number of withdrawals per month.
Money market mutual fund.
If you're parking cash while you figure out where to better invest it, a money market mutual fund might be the better choice because you could then easily transfer those assets into a fund at the same company with a single phone call or click of the mouse.
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Money Market Accounts As An Investment - How It Works, Pros And Cons
With the Fifth Third Relationship Money Market, your standard savings account is elevated to a high interest savings account with the ability to grow your balance. Our Relationship Money Market rates are tiered based on the balance in your savings account. The larger your balance, the higher your rates.
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