Managing a money market account is very similar to managing your every day savings account or checking account. Just like your typical savings or checking account, you can withdraw your money instantly from a money market account whenever you want – although you are limited to a certain number of withdrawal transactions per month (usually between three and six).
Know the Fees and Transaction Limitations
It’s important to understand the fees and charges associated with a money market account, so you can avoid them. For example, almost all money market accounts have a minimum balance requirement and if you happen to have less in your account than that stated minimum- you will pay a fee (usually around $5). What’s more, is if your balance is below the required minimum, often a money market account will then charge a fee for every transaction made, even if you are within your maximum number of withdrawals for the month.
Do Your Homework: Compare Different Money Market Accounts
Because money market accounts have a range of possible fees and charges, you should always shop around and compare what different banks offer for money market accounts before opening one.. Compare the following features of money market accounts to help you make your selection::
- Fees and services charges on the account and when they occur (or how to avoid them)
- Minimum balance requirements (choose one that offers a minimum you know you can maintain)
- The amount of interest paid on your balance
Keeping Track of Your Balance
Just as you use a check register or a statement book to keep track of your deposits and withdrawals from your savings or checking accounts, you should use a register to help you keep track of your money market account. Start your register with your original deposit, and record any withdrawals and deposits along the way just as you normally would for any other bank account. When the bank reports interest paid, be sure to include that in your register as well, in order to keep your balance accurate, as well as deducting any fees you pay for having the account.
How to Make Deposits and Withdrawals
When comparing various money market accounts, take a look at the deposit and withdrawal methods the account allows to make sure it will fit in with your style of banking. Can you easily transfer money from another bank account into your money market account? Is it free to transfer money or does that result in a fee? If there are fees involved for money transfers, you’ll want to keep a close watch as to how many transfers you initiate per month to make sure you aren’t paying to deposit money.
If you prefer to use an ATM to make deposits, you’ll want to verify that the money market account you are looking to open allows it as not all of them will. Most will allow withdrawals by ATM as well as through a bank transfer, but again – check whether there are fees associated with these transactions and decide whether you can effectively bank without incurring excessive fees that will negate the amount of interest the account is earning. It may simply require slight changes in how you are used to handling your money and bank accounts; or having a separate savings or checking account for your every day spending requirements and keeping the money market account as your long-term or emergency savings that isn’t accessed quite as often.