An online money market is type of financial account. Essentially, this type of account, which can be managed online, combines elements of a savings account and checking account in one. When a person deposits money into an online money market account, he can usually earn more interest on the money than he would if he chose a traditional savings account. He can also write checks on the money and make withdrawals, the number of withdrawals he is allowed in a given month are usually limited. If he exceeds the maximum number of withdrawals, he may have to pay a fee.
When a person opens an online money market account, he usually does so in order to enjoy a higher yield on the money he’ll have on deposit with a financial institution. The amount of interest an individual can earn, however, varies. Some online money market accounts earn little more than traditional savings accounts, while others earn significantly more. As such, people usually compare accounts offered by different financial institutions before choosing one.
In countries in which bank deposits are insured up to a certain amount, money markets are usually insured as well. This means if the financial institution fails or goes out of business for any reason, the money a person has in the account, up to the maximum amount insured, will not be lost. An individual who wants to open an online money market account may do well to check the laws and standards in his jurisdiction, as they may vary depending on the country or region in which he will deposit his money.
Online money market accounts allow account holders to have easy access to their money. Often, people can access their money by writing checks, making automated teller machine (ATM) withdrawals, wiring money, or by making withdrawals over a bank’s counter. With an online account, a person may be able to access his money through online transfers and bill-paying programs as well. There are rules that govern how many withdrawals a person can make with this type of account, however. If an individual goes over the number of allowed withdrawals, he is typically required to pay a fee for each withdrawal over the maximum.
In most cases, opening an online money market account means agreeing to keep a certain amount of money deposited in the account. Typically, money market accounts have minimum opening deposits. They often have minimum daily balance requirements as well. If a person’s account balance falls below the minimum, he may be charged a fee. The exact balance rules and requirements for this type of account depend on the financial institution that offers it.
An online money market is basically the same as a regular money market account, except that a person can perform a range of account-related tasks online. For example, he can usually check his balance and make account inquiries online. He may be able to transfer money between accounts and pay bills via the Internet as well. He may also access his account statements via the Internet and view canceled checks. In many cases, an online account holder will even have the ability to initiate stop payments on checks and set up overdraft protection online.