How Money Market Accounts Work

In USA, anybody can open money market account which is just like saving account but it is insured by national credit union administration and FDIC. Even bank will fail but your money will be returned. You also get small higher interest on this saving.



These type of bank accounts were started in 1980. That time, minimum balance was $ 2500.

Main Points of Working of Money Market Accounts

1. Compound Interest

Interest is compound on daily basis and you will get interest at the end of month. It is not fixed rate but it is calculated on the current market interest rates in money market.

2. Limitation of Withdrawing the Money

You can withdraw maximum six times in the month. Otherwise, you have to pay penalty. You have also keep minimum balance in the bank. ATM transaction will not be in six withdraws.

3. Credit Union

These types account, you can directly open also in credit union. These are the non-profit organisation and support depositor to save money and grow money. If it is not directly in the credit union, then credit union may insure your saving by connecting with your bank. In India, co-operative  financial institutes' behaviour is like credit union.