what exactly is a money market account?

how does it work? what is it?
thanks!!

Re: what exactly is a money market account?

You don't even know what a loaded question this is...

"Money Market

A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. The money market is used by participants as a means for borrowing and lending in the short term, from several days to just under a year. Money market securities consist of negotiable certificates of deposit (CDs), bankers acceptances, U.S. Treasury bills, commercial paper, municipal notes, federal funds and repurchase agreements (repos).

The money market is used by a wide array of participants, from a company raising money by selling commercial paper into the market to an investor purchasing CDs as a safe place to park money in the short term. The money market is typically seen as a safe place to put money due the highly liquid nature of the securities and short maturities, but there are risks in the market that any investor needs to be aware of including the risk of default on securities such as commercial paper. "

Re: what exactly is a money market account?

I think its like a higher interest savings account (the one i have has like a 1.97% interest rate). I dont know if there's more to it though- i use it basically as a holding account for my stock investments.

Re: what exactly is a money market account?

You're also limited in the amount of withdrawals you do in a month...

For instance I believe in my money market account - I'm only allowed to make 3 withdrawals per month...


It's a higher interest savings account / less restrictive than a CD.

Re: what exactly is a money market account?

so it works like a savings.. you are limited to withdrawals.. and they give you a higer interest rate b.c the bank is investing your money
- but aren't all banks doing that? investing your money..

anyhow, so what is the best bank for money market accounts?

thanks again!! i am trying to peace this all together!!

Re: what exactly is a money market account?

there are some savings accounts that are offering much higher interest rates than the MM accounts, and with fewer restrictions- that may be worth looking into.

What are you looking for in a MM account (meaning, why that over a high interest savings account)?

I dont keep much in my MM account- just transfer funds into it that i'm intending to use to buy shares (its with the same company). Most of our $$ (thats not invested) is in a high interest savings account.