Now we are getting into an area of banking that is fairly pricey, Money Market Accounts.  These are the cool accounts that rich people all seem to have, and they refer to them with all kinds of cool slang that I think they make up just to test me… ANYWAYS

Three Reasons Money Market Bank Accounts are great:

1. Better interest than a savings account.
2. More liquid than a CD (the money is available at any time)
3. You can write checks off of it (Federal regulations limit the amount of checks in a 1 month period though)

Better interest is dependent on the amount of money in the money market, it’s typically set up in levels so $0-$1000 may not pay much interest, but once you get closer to $10,000 the interest gets competitive with CDs.  Rich people love talking about their money markets for that very reason, if you have one, others know that you have a good chunk of cash set aside for some extravagant spending.

The liquidity of the account makes it a very attractive option for an emergency account, and if there are no emergencies, you just let your money earn interest at a better rate than your savings.

Check writing makes it the All-Star of banking products, since even big emergency expenses can be taken care of by this account.

The Fee Situation

Financials don’t play around with larger sums of money, and with these accounts, there are all kinds of fees that are there to keep you in line.  Look for a minimum balance fee, a violation of regulations fee (i.e. for writing too many checks) and possibly a service fee (in case you don’t have other piles of money with that bank in other kinds of accounts).