Who Can Start a Money Market Account?
In a bank, "money market account" refers to a savings account that allows you to write checks against its balance. The SEC defines the term as a mutual fund that functions the same way. A money fund is regulated to invest only in low-risk securities. The FDIC does not insure money market funds.
Other People Are Reading
-
Significance
-
According to Investopedia, money market funds can potentially earn more than a bank savings account, depending on the short-term interest rate environment. Like bank savings accounts, money market accounts provide liquidity so you can access your funds when you need them.
Types
-
Check with your bank to learn its specific requirements to open one of its money market accounts. If a mutual fund money account sounds interesting, you can open an account directly with the fund company or through a brokerage.
-
Considerations
-
A money market account can be opened by anyone who has money to put in it. You can title your account in your own name, the name of your trust, or as a corporate account. Generally, a child's account is titled as a custodial account. Read the fund's prospectus for information about its fees, minimum balances and transaction limitations.
-
References
Resources
- Photo Credit Paying Bills image by ne_fall_photos from Fotolia.com
