Online Financial Tips

Archive for the ‘Money Market Accounts’ Category

Historically, the interest rates paid on money market accounts have always been lower than CD rates and other financial investment accounts. The main reason for the rate being lower in a money market account is the accessibly of cash even though you may only have limited withdrawals each month. Another reason a money market account is used would be when people are between investments and a holding account is needed. The majority of people who use this type of account have it with their stock broker. Others just have it to earn a little on their money which is better than nothing. As a matter of fact treasuries have paid nothing in the recent past and currently are paying less than 1%. The rates are at an all-time low.

It is however, an account that pays you a little something up until you find some investment alternatives. You can lock up your money in a certificate of deposit or Treasury Bills for up to 6 months or longer. Depending on your bank, the longer you go, the higher the rate. However, because the interest rates are low everywhere most people are remaining somewhat liquid and stay in a MMA until the rates increase and are attractive for a longer term.

Banks are becoming very aggressive for your deposit business, so you may be able to take advantage of an incentive a bank is offering if you change banks.

If you have a good relationship with your bank, ask to see if your current interest rate can be increased or you will go across the street where you can get more interest. This tactic works sometimes. It doesnít hurt to ask. You may end up with a CD rate on your money market account and even if it is a little better rate, you are the winner and still have your funds available to seek out another investment that you may find attractive.

If you’re ready to take advantage of an FDIC insured option with above average interest rates to save your money, you’ll want to take a look at how to open a money market account. These deposit accounts are part savings and part checking account – in that you are allowed to withdraw money by writing a limited number of checks each month. The bank invests the money you deposit into your money market account for you, and your money is protected up to the FDIC insured limits.

1. Comparison Shop
Before you run out and open a money market account with the first financial institution you come across, you’ll want to take some time to “comparison shop”. You wouldn’t buy the first car or first house you saw, and selecting financial investments and savings opportunities isn’t any different. Money market accounts are not all the same across various financial institutions, so you’ll want to look around for the best terms and yields available. You can use websites to do the comparisons across multiple banks and credit unions for you and save time.

2. Choose Your Features
Surprisingly enough, even money market accounts offer a variety of features and terms to choose from. Decide how often you plan to write checks from your money market account, and then narrow down your selections to those accounts that have your minimum checking writing requirement. Decide how often you’ll need to withdraw money from your account, and then narrow down your choices to those that allow enough fee-free withdrawal options per month to meet those needs. If none of the accounts exactly match how often you think you’ll need these features, choose the best match or accounts with the lowest fees for going over check writing or withdrawal limitations.

3. Compare Account Fees
You always want to select banking products that charge you the least amount in fees possible for the features you require in order to keep more of your money. Try to avoid monthly maintenance fees whenever possible. Look for accounts that either don’t require a minimum balance to avoid a fee or a low enough minimum balance requirement that you know you can keep your balance above that amount and avoid a maintenance fee.

4. Look at Minimum Deposit and Minimum Balance Requirements
How much money do you have available for your initial deposit? This will play a role in determining which money market accounts are available for you to open since they all have a minimum deposit requirement to meet. Most money market accounts can be opened for between $500 and $2,500 initially, and many will require the same amount for a minimum balance or you will pay penalties or maintenance fees.

5. Contact Banks that Meet Your Requirements
Once you’ve found a few banks that offer money market accounts to meet your needs, call and ask them to mail you application forms and full account details. Sometimes you can open an account online or through the mail. If you already have other bank accounts with a specific bank, you can often open a new account over the phone. Some banks give special perks to people who open multiple types of accounts at the same bank, so if you already have a checking or savings account at a particular institution, make sure to see if you get any extra benefits for opening a money market there, as well.

If you have started the Dave Ramsey 7-step plan to wealth, you have most likely asked yourself, “Ok, I have saved up my emergency fund, but where do I put the money?” This is a great question that I have often asked myself as well. The current yield on an average checking account is something like 0.02%; meaning that if you have $1,000 in your account, the bank will pay you a whopping 20 cents for the year. Yep, that’s 20 pennies from the interest. Clearly, this isn’t a wise place to park your money.

Where can we put our money so that it yields greater interest? Well, this is a correct question to ask, but it’s not the only question. There is another portion to the equation. Not only do you want a high yield, but you also need your funds to be liquid in the event that there is an emergency. Let me explain. At this current moment in time, a house could be a great investment. The prices are rock-bottom and the interest rates for loans are at an all-time low. But, if you invest your emergency funds in a property, there is no quick way to retrieve that money. At the very least, your money is tied up for months, perhaps even years. This just isn’t a valid option for an emergency fund investment.

Another investment vehicle you may hear a lot about is mutual funds. Because they are naturally diversified, it is a much safer investment, but this is still not a place to park your emergency funds. Just like the stock market, mutual funds rise and fall and could leave you with fewer dollars than when you initially invested.

Your emergency fund should be making more than 0.02% interest per year, but don’t expect it to yield 15%. At this point in time, if your emergency fund makes more than 1.2% interest and is completely liquid, you have done well. Take a look at the money market and online savings accounts. Currently, Capital One Bank is offering 1.35% interest if you invest more than $1,000 with them. Likewise, American Express Bank is offering 1.3%, but there is no minimum investment.

Online savings accounts are great too, but make sure you do your research. You may find some excellent rates, but you may also never see your money again.

Also, make sure that your account offers you the option to write at least two checks a month without penalty. For most money market accounts and online savings account, this shouldn’t be a concern, but if you decide to venture into Certificates of Deposit (which may be another good option, but most do not offer the ability to remove your money without penalty), you will most certainly want to make sure that you look into this.

If you follow this advice, as well as the advice within my related articles, you will certainly be on your way to becoming debt-free.

US Savings accounts can be of three types namely money market accounts, CD (Certificate of Deposit) and equity savings accounts. Among these money market accounts are those that yield high interest rates and yield. Let us discuss about these types of accounts.These accounts generally offer very high interest rates on the investments. Typical interest rates are higher than 1% per year. These interests would be compounded and credited monthly. Though these types of accounts yield higher when compared to CD accounts there are some disadvantages associated.

The major drawback of having money market savings account is the limit put on the number of check or online transactions. Every bank has its own statement cycle period. Generally the cycle is about two to three months. Every bank imposes a restriction on the number of free transactions during this cycle. There are many banks which charge additional transactional fees when six online transactions are exceeded. The rates would be high in the order of 10 to 15 USD per transaction.

There are also great benefits associated with these accounts. Almost all savings accounts require an initial deposit or balance of about 1000 to 1500 USD. However these accounts generally don’t require an initial deposit.But there are some banks which require a minimum balance even for money market accounts.

Apart from zero initial balance, many US banks don’t charge for monthly maintenance. All accounts other than money market accounts are associated with monthly charges of nearly 8$ per month or per statement cycle.

A money market deposit account is mainly opened with the aim of investing your savings in the money market world. These accounts are also called as deposit accounts which are almost similar to savings accounts. But unlike a savings account, these accounts have certain restrictions with regard to writing of checks are concerned. Just as other saving accounts are insured, money market deposit account is also insured. These accounts are usually managed by the bank or you also have the brokers handling it too. This account is an easy way to deposit money which is used for upcoming investments.

These accounts are totally safe though the interest rate is also low. You can find similarities in a money market deposit account when you compare it with a saving account. Yet I must say that both of them still differ with respect to certain features. Only few withdrawal transactions are allowed per month, when it comes to dealing with third parties. Banks try to discourage customers from going beyond their limit while their withdrawal transaction is concerned. If banks find the account holder to exceed the number of withdrawal transaction, then in such a case, the bank might impose high fees. Also it may go to the extent of closing their accounts. Actually, banks are using this above mentioned system in order to limit the customers transactions. This may not include ATM transactions. All this technique helps the bank to invest the money in a more appropriate way and thus open doors for higher return.

Money markets can easily be compared to a mutual fund, whereby the share price is kept constant. The manager’s who manage their funds in these accounts, will invest them in financial product, such as saving bonds, Certificates of deposit etc. The money earned is then paid out to the money market account holders. In a money market deposit account, cash can be easily made available for other investment plans. The rate of interest in this case depends on how much assets have been deposited by the investor. It does not depend on the maturity date, unlike in h the case of Bank certificate of deposit. So the rich investors may enjoy the benefits, depending upon their investment plan.

The main feature of this account is that, it has restrictions as far as writing a check is concerned. In the case of money market deposit account, you can save money and at the same time you can have access to your funds.

Forex is highly complicated and speculative. The largest financial market in the world, there is money to be made earned from it, lots of it, if you have patience and perseverance to learn how it works. It goes without saying that you come prepared and the best way to do that is have some experience in trading before you put real money in the table. Demo accounts provide this experience, albeit a simulated one.

The best thing about forex demo accounts is that it gives you a feel of the market without putting your money at risk. And as long as you really study the factors that influence currency values, you need you brush up on you economic theories and get in other things besides, constant practice in these accounts can help you develop a sound trading strategy that have good chances of bringing in the money.

Of course, practice trading is not the same as the real one and some new traders get the jitters when faced with a situation where real money is at stake. This is one reason why you have to take demo trades seriously as if you’re trading real money. Demo trading is there supposedly to prepare you for forex wars and you cannot think that a few practice trades where you trade knowing that there are no risks involved is enough. You should practice with the objective of acquiring all the knowledge that can help you in actual trading situations. Do not get a false sense of security after some “profitable” sessions with the demo account. Practice in all trading scenarios which you are likely to encounter when you start the real one. Some experts say you need at least of months to be really prepared to meet the challenges of the market. There’s no other way except, of course, by opting for forex managed accounts, but that’s not the same thing. You’ll the excitement of doing it and earning the money yourself. So get your demo account and study the market. What’s a couple of months when there are millions to be made?