Paypal Sucks. Money Markets Are Better!   no comments

Posted at 4:14 pm in Paypal Hate

This blog is to tell everyone that Paypal is NOT a bank.  Therefore, they don’t have to heed by banking rules and can tie up your money for literally no reason at all.

Now that we got that off our chest, we’d like to introduce you to our blog about MONEY.


This site is about money and everything that has to do with investing.  Our first topic of discussion will be about the Money Market.

Money Markets – A Safe Place to Keep Funds

An increasing number of individuals are seeking to open a traditional money market account in order to save and protect their money.  This however does not come as a surprise, given the state of the economy. As the state of the economy worsens, we are seeing even big financial institutions being stripped to their knees due to the accelerating global recession that has pretty much affected every individual.

Investors are also shying away from high risk financial policies and strategies and are quite satisfied with the existing conditions of leaving their money instead of spending it on investments, where it may or may not growth as it generally would in riskier investments. Instead of going for high returns by taking up more risks, investors are choosing options where their money is safe and secure. Today, security and safety have substituted risk, return and yield as the main drivers of investment.

This is the reason why a lot of people are choosing to open a money market account. With a money market account, one is able to get the better of two worlds since with such account, your money will be FDIC insured. Having your account insured by the FDIC means that it is being protected by the big guns while at the same time, a money market account also provides higher interest as compared to a regular savings or checking account.

Every money market account comes with different set of terms and conditions. However generally, there will not be much of a difference amongst the top ones present in the market. One should however spend time and check what is going on in different accounts to make sure they are able to comply.

Money market accounts are quite similar to usual savings accounts but come with additional features that are meant to boost yields. It is also safe to say that a credit union money market account offers increased flexibility and is also the right option for individuals who don’t need to dig in their savings daily or regularly.

Features of Money Market

When choosing a financial money account, members should be cautious and careful about the advantages and disadvantages of this account and usual savings account.

Higher Yields And Interest Rates

Money market accounts come with withdrawal restrictions and balanced thresholds and therefore, they consistently offer higher interest rates in contrast to usual saving accounts.

Restricted Withdrawals

There are a lot of credit institutions that limit the number of withdrawals allowed per day or on a monthly basis. This limit can vary from as little as three days to up to six months.

NCUA Insurance

One of the biggest advantages and prominent features of financial market accounts is that they are protected by NCUA insurance and the biggest benefit of this type of insurance is that an account that is insured by NCUA never loses money.


Premature Withdrawal Fees

Usually, banks do charge early withdrawal fees but a credit union or financial institution that doesn’t is always preferable. Hidden fees are one of the biggest hassles for every type of customer and it is always better to avoid it.


Advantages of Money Market Accounts

The top money market accounts can be linked to other banking accounts as well such as savings accounts and checking accounts to stay clear from overdraft fees. Moreover, accounts are not as high risk investments as compared to other financial products such as stock market or mutual funds. The return on such account sis not as high and this is a point that should be kept in mind by conservative savers as a market account might prove to be the best short term savings vehicle for the short run.

For all those who still don’t understand what a money market account is, to understand it better, one can think of it as a low risk substitute to typical savings account that provide individuals with the simplicity of writing checks when earning a good interest rate on their savings. Money accounts are extremely popular due to their many advantages.

Therefore, the next time the thought about what is a money market account crosses your mind, you can call it a low risk and stable substitute to savings account that provides one the facility of writing checks whilst earning a competitive interest rate on their money deposited as savings. Since money market accounts offer many benefits, they are one of the hottest products offered by financial institutions today. It is also important to keep in mind that interest rates change every day and therefore if you are able to find a better or very attractive rate in the market, it will be in your best interest reap the benefits of the highest rates as the rate you might be getting today will not be there tomorrow.

In a nutshell, a money market account, also known as money market deposit account, is an account that pays holders interest based on the existing interest rates available in money markets. The rate of interest of money market accounts is comparatively higher. These accounts also require a higher minimum balance. Typically, the balance can range from $1,000 to $10,000 and up to $25,000. The minimum balance requirements must be set to avert high monthly fee and to earn interest. The overall investment strategy of money market accounts can be compared to that of money market funds that are available through brokers. However, in all other regards, both these accounts are different.
In the U.S, a money market account is also referred to as a deposit account which is categorized as a savings account for certain purposes. However, checks can be written on the account but there are certain restrictions on this too. The money market account or money market deposit account is structured to fully comply with Regulation Q.  To sum up the description of money market accounts, it can be said that they are accounts on which one can write checks on, they bear interest but because of certain restrictions, one cannot classify them as demand deposits. Money market accounts can also not run afoul of the guidelines, rules and restrictions set by Regulation Q.

As money market accounts are not transaction accounts or at least are not considered as transaction accounts, they are regulated just as saving accounts are. One can make six withdrawal transactions on money market accounts to third parties under the Regulation D. Moreover, banks don’t encourage customers to exceed this limit and usually impose high fees if one makes more than six transactions. Some banks also go to the extent of closing the accounts as penalty.

To conclude, money market accounts function like savings accounts; they are subject to penalty and come with restrictions, if the restrictions are violated. However, at the same time, they offer higher benefits than other accounts as the interest they offer is higher and provide investors with a good opportunity to build on their wealth and save their money in the most efficient manner.  For more advice on personal finance, click here for a good read:

Written by Admin on February 20th, 2013

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