Money Market Rates in Banks: How to Compare Them
Money market funds are investment funds that banks and other financial institutions offer. Money markets include short-term debt obligations. These funds offer modest interest rates and are considered a safer investment than stocks.
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Interest Rates
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Comparing interest rates can be done easily from the comfort of your home. Call local banking branches or credit unions and ask what money market rates they are offering. Also, by searching interest rate databases such as Bankrate.com, MyBankTracker.com or Bankaholic.com. There you can compare multiple, non-local money market rates at once.
How to Calculate
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Calculating an interest rate is a good way to predict your return. Let's say you have $5,000 in a money market with an interest rate of 1.2 percent. Multiply the account balance by the interest rate for your yearly interest payment ($5,000 x 1.2% = $60).
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Considerations
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A few additional factors than can affect the interest rate need to be considered. Some institutions require a minimum amount to open a money market account. Furthermore, depending on the institution's requirements, higher account balances might yield a higher interest rate, and the money market accounts' length of term also can have an effect. Contact the account issuer for its current details.
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