What Are Money Market Accounts
Over the last few years a lot of financial experts have recommended that you start using a money market account instead of a checking account or a savings account. This is good advice for some people but not for everybody. The advantages only apply in certain situations. It is a good ideas to know what money market accounts are and how they work so you can decide if they are right for you.
A money market account is an account that is offered by your bank that takes the money that you deposit and invests them in government bonds and very safe corporate bonds. The result is an account that pays you a significantly higher interest rate than you would get from a savings account. The great thing about money market accounts is that they are a very safe investment so you don't have to worry about losing your money. Therefore the primary thing that you should be looking for is who offers the best interest rates on money market accounts.
There are some important ways in which money market accounts differ from savings accounts. In fact they are really like a hybrid of a savings account and a checking account with the benefit that they offer a much higher interest rate than either. The most important difference is that you can draw checks on your money market account. You can also withdraw money at the ATM, this makes it much easier to use than a savings account would be. While there are some similarities with a checking account it is important to realize that there area also some differences as well.
The biggest difference between a money market account and a checking account is that the number of checks that you can 
write will be severely limited. This is because under government
regulation a money market account is considered to be a savings account which means that transactions should be limited. Strictly speaking you can write as many checks and make as many withdrawals as you like,
it is your money after all. However the government requires the banks to discourage you from making more than six transactions a month on your account. This is why the fees are so high for transactions after the sixth one,
the government actually requires the bank to do this.
The other big difference between a money market account and a checking account, or a savings account for that matter is that you need to maintain a fairly high minimum balance. Again this is because it is not intended to be a day to day account. Therefore if your balance drops below a certain level the interest rate that you receive will decrease dramatically and the fees will rise quite a bit. If you are not going to maintain a high balance you would be better off with a savings account.