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 MMA to get the most return on your money. With rates so low, these bonuses are a real good deal.

Money market interest is not very high because you can take your money out at any time. Unlike certificate of deposits where the money is locked up for a specific period of time. cash in your money market account is always available to you. For that convenience of immediate liquidity, you will receive a lower interest rate than other investments. However, the beauty of any money market account is that it is at least earning something while remaining available at all times.

You don’t have to own stocks or have a broker to have a money market account. Most any bank, credit union, or other financial institution should have one for you to put your money in. If you have money that is on hold and put aside for buying a house or some other big purchase, money market accounts are typically where people would keep that money. They usually pay more than the very low interest paid by checking accounts and they give you much the same liquidity.

Money market interest that you will be paid depends on how much you have invested. The more you have to put in the account, the higher the interest rate you will get. This is part of the reason that money market interest accounts are sometimes thought of to be only for the rich. That is not the case though, as anyone with money can use them.

A bank CD or certificate of deposit is, and has been, one of the safest historical investment vehicles you can choose. It is hard to use the word “investment” right now though with the best CD rates barely over 2%. With a bank CD, you loan the money for a predetermined amount of time and in exchange the bank gives you a set interest rate. Usually, the longer you agree to loan the money the higher the rate you will get.

Certificate of deposites are nice if you want security and to know exactly what you are getting. Since you know the rate, you will be able to figure out what you will get at the maturity date. They are now insured by the FDIC up to $250,000.00 per person per institution. If you have more than that amount you will need to make deposits at multiple banks to be 100% sure of their safety. Bank CD’s are easy to open and easy to understand which have always made them a favorite.

The only negative is that your money is tied up for the agreed upon length of time. If you need it out sooner, you can get it but there will be a penalty. This makes it important to know what time horizon you have and to not tie your money up longer than you think you might need it.  

Another choice you have is a money market account. Most money market accounts come with some limited check writing ability and a lower interest rate than you could get with a certificate of deposit. Sometimes the best money market rates are dependent upon how much you put in so the more you have to invest, the higher rate you will get.

Depositing money in a money market account is even easier than getting a CD. It is very much like putting money in a checking or savings account at the bank and of course with the check writing ability, it is similar as well. Because you are not obligated to keep your money in the money market account for any lenght of time, the interest rates are traditionally lower than government treasury bills or bank CD’s.

Bank savings account are about the worst option for getting investment income as they always play a very low rate.