Money Market Accounts Increasingly Attractive Investment Option
Like investors throughout the country, customers in the Chicago area are looking to protect their savings. Faced with shrinking 401(k) balances, declining home values, worthless stock options, the possibility of layoffs and the recent instability of the financial system, many people are looking for safe investment choices, regardless of their rate of return. A money market account is one option for these investors.
A money market account operates much like a traditional savings account. So, what is the “money market,” you may ask? The money market is simply a general name used to describe the market where financial institutions and banks lend, borrow and trade money, Certificates of Deposit and other financial instruments. A money market account is a type of savings account that earns higher than average interest. A money market account can be opened quickly and easily at almost any bank and even in minutes online.
The money you save in this type of account will be invested, but the bank or other institution does the investing on your behalf and collects the return. This type of account is insured by the FDIC and is just as safe as keeping your money in a standard savings account. Because it earns a higher rate of interest, there is often a minimum deposit to open a money market account, and there are a few differences in what ways and how frequently you can access your money. Many online banks, however, have very low or no minimum opening balance for these accounts. You may be limited to a set number of withdrawals per month, and these withdrawals may take two or three days to complete.
