A money market account can be a great choice for people who have a lot of money that they want to put away and start earning interest on. It’s a low-risk savings account that may give you a higher APY than some other savings accounts, and definitely typically more than a checking account. If you’re looking to find the highest paying money market accounts, make sure you know these important things first.
1. You May Be Able to Waive Monthly Maintenance Fees
Monthly maintenance fees for money market accounts typically aren’t very high, much like maintenance fees for checking and savings accounts. However, if you’re able to get your balance above a specific threshold, you may be able to waive these fees. Check with the specific money market account that you’re interested in to see if waives are available for maintenance fees.
2. APY Often Increases With Higher Deposits
If you have a higher balance in your money market account, you may be able to get a higher APY on your account. Typically, this doesn’t kick in until at least $10,000, and some accounts may have higher requirements to get the highest APY possible. One of the things you should look for is the ability to increase your APY, especially if you have a significant amount of money that you’re hoping to deposit.
3. You Can Only Make a Certain Number of Transactions Every Month
Legally, you’re limited to a maximum of six transactions per month with a money market account. If you make more than that over a certain period of time, the bank may need to downgrade your account to a checking account. However, some transactions are counted, while other transactions may not be; in-person deposits and withdrawals, for example, typically don’t count against your six-transaction limit.
4. Your Money Market Account May Be Insured
If you’re planning to deposit a significant amount of money, make sure you do it with an FDIC-insured bank. When you get FDIC insurance, you can get up to $250,000 of your deposits covered, or $500,000 if you have a joint account. That means if the bank fails for some reason, you can get up to that dollar amount back. When you have a money market account, especially if you have a lot of money you’re planning to invest, it’s important that you opt for FDIC-insured banks.
Opening a money market account is a great way to save extra money without really having to do anything. You can get a pretty significant APY on your money, making it so that your money is doing the work for you. If you want to open a money market account with the best APY and best features, you first need to know the basics of a money market account in the first place. These four things are four of the most important things to know so that you can make the most out of your money.