investing in your future

Money Market Account Options

Money market mutual funds are another savings option. These give you instant access to your savings and have an interest rate similar to CDs. What’s one drawback to this option?

1. They require constant management.
2. They aren’t federally insured.
3. They limit the amount of interest you earn over time.

“B” is correct. This type of account earns interest at the current short-term market rate, and allows you to write checks in small amounts (i.e., $250 or $500). To open one usually requires at least $1,000, and you have to maintain a balance of at least $500 to $1,000. Money market deposit accounts are another option. Features, conditions, and interest rates on these vary. They often allow you to write a limited number of checks per month (3 or less) and give you a reduced rate of interest if you fall below the required balance.