About Online Money Market Accounts
Money market accounts serve as an alternative option to interest checking accounts and certificates of deposit. An online money market account allows you to handle your money market account through online banking.
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Function
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A money market account allows your money to earn interest at interest rates that are generally higher than a standard checking account. Access to your money market account will be limited to a certain number of checks per month.
Benefits
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Money market accounts give you the chance to earn higher interest rates while keeping your money accessible, unlike CDs. The online banking aspect of an online money market allows you to do your banking at your own convenience.
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Warning
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Money market accounts don't offer fixed interest rates. Therefore, the interest rate on your account may fluctuate upwards or downwards as time passes.
Tips
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Bank Branch Online, a guide to online banking services, recommends certificates of deposit over money market accounts as long as you can afford to not have access to your money on a short-term basis, typically three months or more, because CDs tend to earn more interest.
Considerations
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As of 2010, the Federal Deposit Insurance Corporation insures money invested in money market accounts for up to $250,000 per person. In 2014, the FDIC will be lowering this amount to $100,000 per person.
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