Video: How to Invest in a Money Market Account

Ways to invest in a money-market account include through a bank, a mutual-fund company or through a discount brokerage. Earn interest on saved money with a money-market account with advice from a financial planner in free personal-finance video.

Video Transcript

My name is Julie Asti, I'm a Certified Financial Planner with Asti Financial Management and today I'm going to talk about how to invest in a money market fund. There are really three main ways to invest in a money market fund. The first way, maybe the most easy way is via your bank. A Washington Mutual, a Wells Fargo, a Bank of America, all of those banking institutions are going to offer money market options. Usually the standard when you work with the bank is going to be a checking and a savings account and once you want to earn a little bit higher return, you can invest in a money market fund that would be offered by the bank, and usually offers a higher rate of return than a checking or savings account would. So that's usually going to be the easiest way. There are two other ways to invest in money market funds, two other types of companies have offered them. The second way would be through a mutual fund company. So for example if you have an account at Fidelity, Fidelity definitely offers, Fidelity Mutual, excuse me, Fidelity Money Market Funds. Then you can invest in as an alternative to an equity stock or a bond investment. They also offer higher rates in savings and checking accounts. The rates maybe a little bit higher than a banking institution or they maybe comparable. But if you already have a brokerage account or a mutual fund account at a mutual fund company, they do have a money market option that you can invest in. And the third way that you can invest in a money market fund would be through a discount brokerage. That would be a Schwab or a TD Ameritrade or an E-Trade. Usually those companies have their own proprietary money market vehicles so that when you have a stock or an investment account with them, and you have cash that you're investing or withdrawing out of your portfolio or out of your account, they usually provide you with the money market option that you can invest in as a place holding for cash that earns again a higher rate of return than just a pure savings account. And again the rates on a money market account in an E-Trade or Schwab are probably going to be a little bit higher than your banking institution or they maybe comparable. I'm Julie Asti, a Certified Financial Planner with Asti Financial Management and you can learn more about my company or my services at www.astifinancial.com.

How to Invest in a Money Market Account

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