Money market accounts combine the benefits of checking and savings accounts, giving you the flexibility to write checks from the money you’re investing. To get the most benefits from your investment account, you’ll need to find a bank that offers great interest rates. Your bank won’t always have control over the rates they can offer, as money market rates are determined largely by the interest rates set by the Federal Reserve. However, with a bit of research, you can enjoy a money market account that offers great rates and other benefits.

Watch Your Savings Grow with Higher Interest Rates
Money market rates change frequently and are subject to the state of the economy. You might not be able to count on a set rate like you would with other types of investment accounts. But you can earn higher interest rates when the market is performing well. With a higher rate on your investments, your savings will grow more quickly. To qualify for higher rates, you should plan your investment carefully and research offers from different banks. Investing a large amount at the right time can help you become eligible for better rates.

Flexible Plan Allows You to Withdraw Funds
Spending from a money market account is generally much easier than withdrawing from a savings account. However, there is typically a limit to the number of checks you can write or withdrawals you can make in a single period. Though checking accounts have fewer restrictions, money market accounts allow you to earn interest on your savings while still giving you access to your funds.

Your Money is Protected from the Market
Whether the market reaches an all-time low or hits peak levels, investments in a money market account are always protected. Money market rates are still influenced by the state of the economy, so you will have to account for fluctuating rates. Interest levels can change, but the money you’ve deposited in your account will never be lost. When you’re trying to invest in an unpredictable economy, this is an important feature to consider. Your money is also FDIC-insured, so you’ll never have to worry about losing your investment to a market or bank crash.

More Reliable than a Money Market Fund
It’s important to understand the difference between a money market account and a money market fund, as people often confuse these investment vehicles. While they may sound similar, they actually offer significantly different investment strategies. Money market accounts protect your money in an uncertain market. Your interest rates might change, but your balance will never be affected. However, a money market fund actually invests your money into mutual funds. If the market crashes, you can lose everything you’ve invested. Money market funds are more similar to other investment vehicles, while money market accounts have more in common with standard checking and savings accounts. Before opening your new investment account, be careful to confirm which type of money market product you’re receiving.

Earn Higher Rates with a Higher Balance
When you open a new money market account, your interest rates are influenced by your initial deposit amount. Investing higher amounts can help you become eligible for better interest rates. Banks usually have a minimum deposit required for money market accounts, so you should be sure that you qualify for a high rate before setting up your investment. In some cases, it might be best to delay your investment until you have enough money to reach the next category. Once your account is already opened, you’ll become eligible for higher money market rates by maintaining a high balance and making additional deposits.