GET THE BEST MONEY MARKET INTEREST RATES AT CREDIT UNIONS
One place most people overlook for their financial and banking needs are credit unions. Many credit unions allow members who are residents of the state and you don’t need to be an employee of the company they are associated with. This may not always be the case but it is worth checking into to see if a credit union near you is a better banking option than a bank itself.
Credit unions are often able to give better money market interest rates because they are a not for profit institution. You can get higher interest rates on CD’s, money markets, and savings accounts as well as lower rates for loans and mortgages. Again, this is because credit unions are not for profit like a bank is.
NCUA which stands for the National Credit Union Administration is the government branch which oversees credit unions and insures your deposits. If the credit union you choose is part of NCUA, your money will be insured up to $250,000 through 2013 just like it would be at a bank with FDIC.
With money market interest rates being so low, any improvement over what you can get at a bank is worth looking into. Some credit union interest rates can be a whole 50% better than what you are offered now through a bank which is a signigicant percentage. If you have money put aside that is earning next to nothing, look into the best interest rates offered by some of your local credit unions and you might be tempted to move accounts!
STOCK INVESTORS HAVE CASH IN MONEY MARKET ACCOUNTS
If you have money in the stock market, you probably have a stock broker account. It is rare that all your money will be invested in stocks at the same time and there will usually be a cash balance in your account. This cash balance, rather than sit there and earn nothing is usually swept into a money market account.
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.