DEFINITION:
Investments offering easy access to money, but with a higher rate of return than checking and savings accounts.
PROS:
Higher interest rate than with checking or savings accounts; limited check writing; easy access to money; very safe
CONS:
Not meant to be a long-term investment; interest rate may fluctuate; may need larger amount for initial deposit
Overview
Money market accounts and funds give you easy access to your money, but with a higher rate of return than traditional checking and savings accounts. For that reason, they are ideal places to keep money that you are saving for an emergency, money you plan to need in the short-term, or money that you are planning to invest at a later date.
You can open a money market accounts through banks, brokerage firms, and mutual fund companies.
