Establishing a money market account is an excellent way to create financial stability. Offering more returns than low-risk investments such as savings accounts and certificates of deposit, the right money market can consistently build up a substantial pool of investments over time while avoiding the more volatile aspects of riskier investments. If you are thinking of investing in a money market, here are some ideas on how to choose the right one for your situation.
One of the most important factors has to do with selecting a plan that deals in investments that are within your comfort zone. If you are very conservative financially, than the best money market plans for you will focus on investments with very low volatility. For investors who are a bit more adventurous, there are money markets that deal with investment opportunities that are still considered safe, but do carry a slightly higher degree of risk. Going with a plan that is more in keeping with your general personality and ideas about finances will mean you are much less likely to worry about what is happening with your investment.
The best money market plans will also require a minimum balance that is well within your means to deposit. Keep in mind that just about any money market account does come with a minimum balance requirement. Should you withdraw funds and fall below that minimum, you may face stiff penalties. Go with a plan that has a minimum balance that you feel very confident you can maintain, even if you experience some type of short-term financial crisis.
On the subject of withdrawals, the best money market account for you will allow a maximum number of withdrawals per calendar year that are practical for your situation. If you know that you have a tendency to raid your bank accounts in order to buy things you don’t need, choosing a money market account that limits how often you can make a withdrawal may help you to not waste your investment on things that don’t really matter. On the other hand, if your plan is to use the money market account to generate revenue that you will in turn reinvest in other ventures, you may want a plan that allows withdrawals more frequently.
Taking the time to compare account fees and charges is also essential if you want to secure the best money market account. While there are some fees that are identical from one plan to the next, what you want to evaluate closely are the ancillary frees that are possibly buried in the terms and conditions. Examples include fees related to withdrawals over a certain limit, balance queries and other charges that may not be uppermost in the minds of many investors when they look for a money market savings account.
Don’t forget to shop around for the best rates currently available on money market accounts. After all, the whole point is to earn more interest on your balance than would be possible with a standard savings or checking account. Ideally, you want the highest rate possible while still getting the lowest minimum balance requirement you can command. At the same time, go for as liberal withdrawal terms as you can find. The best money market account for you will provide as many benefits as possible, while allowing you the most latitude in how you make use of the account.