You might be wondering how money market accounts work. This article will discuss the interest rates on these accounts, the minimum balances to open one, and the costs involved in maintaining one. You’ll also learn about the tax implications of opening a money market account. You may want to consider opening one of these accounts to save for retirement. The money you put in these accounts will continue to grow, and you’ll have the option to withdraw some or all of it whenever you wish.
Interest rates on money market accounts
While money market accounts have a similar function to savings accounts, they tend to offer higher rates. However, they often carry higher fees and minimum balance requirements than traditional bank accounts. Online-only banks generally offer higher money market rates than brick-and-mortar institutions. However, these banks may charge higher fees or have minimum balance requirements. If you’re unsure whether a money market account is right for you, compare rates and fees at several banks before making a decision.
The APY (annual percentage yield) is a better measure of a money market account’s earnings than the interest rate alone. The higher the APY, the greater your income on your cash. The APY is also affected by the Federal Reserve, but online banks can still offer you higher APYs. As long as your account balance is at least $5,000, you can earn high APYs.
Minimum balances required to open a money market account
You might be wondering about the minimum balances required to open a money market deposit account. Some institutions require you to have a certain amount deposited monthly or maintain a certain balance in order to earn an APY. This is because they risk losing money if you don’t maintain the required amount every month. You can also check about …