How to Compare Brokerage Money Market Account Rates

You can maximize your return with the right money fund.

While the main purpose of a brokerage account is to provide a vehicle to buy and sell stocks, you may have some cash sitting idle in your account. It pays to have that money working along with your other investment assets. The interest rates on brokerage money market accounts vary, so shopping around could yield some significant financial gains. The fees charged on those accounts vary as well, and those expenses can impact the return on your money.

Things You'll Need

• Brokerage statement

Instructions

1. Review the most recent brokerage statements from the firms with which you do business. Locate the cash balance on your account and the interest rate. The brokerage statement should list the current interest rate on the cash part of your account.

2. Visit websites of several other brokers and compare the interest rates for their money market accounts with what you are earning. Some brokers have more than one money market account available, so compare the interest rates for each one.

3. Review the terms and conditions for each brokerage money market fund. Some money market funds use a tiered structure for their interest rates, meaning that only those accounts with high balances earn the top rate. Determine your average cash balance, and choose the money market account with the best terms for the amount of money you expect to keep on hand.

4. Compare the fees associated with each brokerage money market fund. Because the yields on money market funds typically are low, a small difference in expenses can have a significant affect on your total return.

References

• TD Ameritrade: Money Market Funds