If you're ready to take advantage of an FDIC insured option with above average interest rates to save your money, you'll want to take a look at how to open a money market account. These deposit accounts are part savings and part checking account – in that you are allowed to withdraw money by writing a limited number of checks each month. The bank invests the money you deposit into your money market account for you, and your money is protected up to the FDIC insured limits.
1. Comparison Shop
Before you run out and open a money market account with the first financial institution you come across, you'll want to take some time to “comparison shop”. You wouldn't buy the first car or first house you saw, and selecting financial investments and savings opportunities isn't any different. Money market accounts are not all the same across various financial institutions, so you'll want to look around for the best terms and yields available. You can use websites to do the comparisons across multiple banks and credit unions for you and save time.
2. Choose Your Features
Surprisingly enough, even money market accounts offer a variety of features and terms to choose from. Decide how often you plan to write checks from your money market account, and then narrow down your selections to those accounts that have your minimum checking writing requirement. Decide how often you'll need to withdraw money from your account, and then narrow down your choices to those that allow enough fee-free withdrawal options per month to meet those needs. If none of the accounts exactly match how often you think you'll need these features, choose the best match or accounts with the lowest fees for going over check writing or withdrawal limitations.
3. Compare Account Fees
You always want to select banking products that charge you the least amount in fees possible for the features you require in order to keep more of your money. Try to avoid monthly maintenance fees whenever possible. Look for accounts that either don't require a minimum balance to avoid a fee or a low enough minimum balance requirement that you know you can keep your balance above that amount and avoid a maintenance fee.
4. Look at Minimum Deposit and Minimum Balance Requirements
How much money do you have available for your initial deposit? This will play a role in determining which money market accounts are available for you to open since they all have a minimum deposit requirement to meet. Most money market accounts can be opened for between $500 and $2,500 initially, and many will require the same amount for a minimum balance or you will pay penalties or maintenance fees.
5. Contact Banks that Meet Your Requirements
Once you've found a few banks that offer money market accounts to meet your needs, call and ask them to mail you application forms and full account details. Sometimes you can open an account online or through the mail. If you already have other bank accounts with a specific bank, you can often open a new account over the phone. Some banks give special perks to people who open multiple types of accounts at the same bank, so if you already have a checking or savings account at a particular institution, make sure to see if you get any extra benefits for opening a money market there, as well.