Disadvantages of Money Market Accounts

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The disadvantages of money market accounts include having difficulty getting money out, high minimums and the potential for unsecured accounts. Read the prospectus carefully for a money market account with advice from a financial consultant in this free video on investments.

Part of the Video Series: Investment Tips & Financial Planning
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Video Transcript

Are you an investor in a money market account, have you started to figure out some of the disadvantages of being in there? Hi this is Roger Groh at Groh Asset. Gradually over time the disadvantages of being in a money market which used to be your money was locked up for a while or was invested in mystery investments or they were hard to talk to to get your money out from, gradually those have disappeared and more and more money market accounts are just regular old accounts that trade at your bank or brokerage firm. Now one big change occurred in late 2008 where the United States government and other governments around the world started guaranteeing money market funds the same way as they do savings and checking accounts. Now minimums are going to be different and not all money market funds are guaranteed, but it's certainly a major event in the history of money market funds. The advantage of course is you historically received more interest then you would in a base checking or savings account. So like always, read the prospectus to find out the details of any money market fund that you're considering putting your money into. See if they're guaranteed or not, see what types of investments that they're actually making on your behalf and be careful. I'm Roger Groh at Groh Asset Management and thank you very much for spending time with me.

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