What Is a Money Market Savings Account?

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A money market savings account is an account that takes deposited money and invests it into stocks and bonds. Be aware that money market accounts are not as secure as traditional savings accounts with information from an investment consultant in this free video on bank accounts.

Part of the Video Series: Personal Finance & Money Management
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Video Transcript

Hi, I'm Roger Groh. We're here today to talk about money market savings accounts. Remember when you were a kid and you would go by your neighborhood bank and there would be a sign that said saving interest rate 4%. That was a rate that your bank was offering to you for any deposits that you left with them in a savings account. Principally it's savings and loans institutions. Today you have many choices of what you would like to do with the money that you put into a savings account. Certainly you can do the traditional savings rate but also you can tell them to put it in money market funds. The difference is that traditionally money market funds pay more than savings accounts traditionally pay. However you should be aware that the security of the money that you invest will be different and you need to be very careful about whether or not the investments in a money market fund are guaranteed. They may not be meaning they may be a stock or a bond, viewed as a stock or a bond instead of a federally guaranteed place to save your money. So be very careful when you start to put your money into money market savings accounts. Most banks have them, most federal credit unions have them and certainly your, any place that you have a brokerage account would have one also. So those are examples, just be careful. Any money traditionally money that you've invested in a money market account might very well be susceptible to a loss. Money that you've invested in a bank and they've given you interest on is not susceptible to a loss up to 100,000 dollars. I'm Roger Groh and that's a little bit about money market savings accounts.

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