What is a Money Market account?
To understand Money Market Accounts and Money Market Funds, it helps to know the difference between the two, and to understand what the “Money Market” is to begin with. Money Market is simply a generic name used to describe the market wherein banks and other financial institutions lend, borrow and trade money, Certificates of Deposit and other financial instruments. A Money Market Account is basically a premium account, or a high interest savings account. Also known as an MMA, a Money Market Account should not be mistaken for a Money Market Fund. A Money Market Fund is an investment strategy with larger returns than a premium savings account. A Money Market Account can be opened very simply at almost any bank. The money you keep in such an account will be invested, but the bank or other institution does the investing and collects the return. Your money is usually put into investments like CDs, or Certificates of Deposit, T-bills, a nickname for Treasury Bills, or other safe financial i
It’s good to know that as a teen you’re interested in savings options and that you’re thinking about the best way to save. A money market account is simply a bank deposit that earns interest, but also allows a saver to withdraw money when needed. A common way to withdraw money from the account is by writing a check.
