What is a money market account?
A money market account is a financial tool that allows an investor to earn interest on their money while not having to tie it up for any fixed amount of time. A money market account is an excellent investment tool for someone who does not need immediate access to their money, but wants the flexibility to access their money when the need arises.
What is the rate of return on a money market account?
The interest rate on a money market account will vary by financial institution. The more you are willing to invest, the better rate of return you can expect to receive. In general, the interest rate on a money market account is typically better than the interest you would earn on a regular savings account. However, since you do not have to commit to any time frame of investing, the interest rate on a money market account in general is less than the rate you would get by investing into a certificate of deposit (CD).
Since every financial institution offers different rates of return on their money market accounts, it can take to time to do thorough research.
Are there withdrawl penalties for money market accounts?
Most financial institutions do not charge withdrawl penalties on their money market accounts. However, some may limit the number of times that you can make a withdrawl from your money market account in any given month.