If you’re going to open a money market account, your first priority is comparing money market rates. Naturally you want to shop around to be sure you’re getting the highest interest on the money you’re going to invest. But when you’re in the process of deciding where to go, in addition to money market rates, you want to look over all of the guidelines regulating your account startup and maintenance. Getting a great rate through a private broker may not pay off as well in the end if you pay a walloping sum just to get started or if you’re very limited in terms of withdrawals or penalty fees during the course of your investment term.
In most respects, your money market account is comparable to a savings account. Money market rates are actually where the primary difference comes in, because they’re often much higher than the interest you can gain on your savings account. That’s because when you enter a money market account agreement, you’re giving financial institutions permission to move and invest your money as they see fit to cover their own investments. Allowing them to finagle these “liquid” assets for a limited time in exchange gets you a higher rate than would storing your money with them in an account they can’t touch. But don’t worry about the changing marketplace; your investment and the interest that’s promise to you are both protected by the Federal Deposit Insurance Corporation (FDIC).
The secondary aspect to this investment is very straightforward: You need to add as much money as you can to your account. Money market rates are important, but they don’t mean much if you don’t intend to aggressively invest and add money as you earn it. The great thing about money market accounts is that you can move your cash pretty freely to and from them. There are some limitations, but there is also a lot of movement flexibility as compared to other savings and retirement accounts. Therefore, there’s really no downside to putting as much as you can spare into your money market account in order to take the most advantageous of great money market rates. If you need that money later, after it’s helped you earn some added interest, then you can take it back out again.
The Money Market FAQ page at Discover Bank’s website provides a thorough overview of this investment form for further information, but please be aware that Discover Bank money market rates do not necessarily represent standard national money market rates.
T.M. Murphy is a professional writer who lives in NYC. She specializes in fashion, beauty, marketing and finance articles. For easy-to-understand financial and banking advice to use on topics such as Discover Bank money market rates, she turns to http://www.discoverbank.com. T.M. Murphy has been writing full-time since 2006, when she graduated with a B.A. in English from Northeastern University.
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