ALWAYS ASK FOR A MONEY MARKET INTEREST RATE BONUS
One thing you might not have even considered is that sometimes you might be able to get a money market account that has an interest rate very close to that of a 1 year CD. Most people think that to get the highest rates you need to get some vehicle that is time sensitive and ties your money up for 6 months, one year, or longer. Traditionally the two most popular choices have been Treasury bills and bank certificates of deposits.
Now though, with interest rates so low, another option might be staring you right in the face and with it comes more flexibility. Money market accounts offer interest rates that fluctuate with your balance. Typically, the more you have in your account, the higher interest you will get so in order to have it approach what you would get for a CD, you will usually have to deposit more than $10,000.
The $10,000 amount is where the biggest jump in interest is for many money markets but it may vary with your bank. Regardless where the big break occurs, as long as you maintain a balance over that amount you will earn the higher rate.
What you might not know is that many banks and institutions have some sort of a promotional bonus rate that is usually very easy to get. This will raise your money market interest rate as much as a quarter of a point (.25%). It is this bonus rate that will allow you to get a rate that challenges that of a timed instrument and give you total flexibility to remove your money any time as only a money market account can.
With a bonus rate thown in, you might be able to get very close to 1% or more even in today’s environment. To get that high a rate you will probably need around $100,000 in the account but an extra quarter of a percent might be available for all amounts. To get the bonus rate you may have to satisfy some qualification such as have money put in the account electronically every month or some other stipulation.
The main thing is that banks are often having different promotions so it never hurts to ask. Take advantage of all promotional bonus interest rates for CD’s and money markets to get the most return on your money. With rates so low, these bonuses are a real good deal.
MONEY MARKET INTEREST RATES DEPEND ON YOUR BALANCE
With interest rates being so low now, no one is going to give you a rate you are happy with. The best thing about money market interest rates though, is that they are variable and go up with the more you put in.
Everyone knows that the big advantage to a money market account is the ability to get your money out at any time. Unlike bank cd’s where you agree to give them your money for a set period of time, money markets allow you to take any part of your money out at any time with no penalty. They also pay a higher rate of interest than savings accounts.
The chart below is from Bank of America and shows their money market interest rates breakdown. You can see that the big jump in interest is made when you maintain a balance of over $10,000. At that point the rate goes up .35% from .15% to .5%. After that, there are other interest rate hikes for even higher balances but the difference is minimal after the $10,000 jump.
You will also see in that chart that there is also a bonus rate section and many banks and financial institutions will offer some sort of a bonus if you qualify. In this case, as you can read below, in order to qualify for the higher bonus money market interest rates you have to do one of three things, any of which are quite easy. For fulfilling one of those requirements, you get a significant jump in your rate and so it is obviously worth it to try to qualify.
Money market accounts are great for people who have more than $10,000 sitting in a checking account or have money that they don’t want to tie up. Savings accounts pay almost nothing in interest and this is one of the best options to earn some money with your money rather than having it just sit their making nothing.
