Banking Tips for a Money Market Account

It’s hard to argue with the benefits of opening a money market account. This type of premium, high-interest banking option can help you earn extra money over time with no more risk than your regular savings account. You don’t need to have any specialized financial knowledge to get started, either. Its approachability and user-friendliness is one of its key assets, along with being a very low-risk savings strategy. But there are some tips that can improve your experience and help you earn as much money as possible.

1. Put aside some savings in advance. Many banks require you to open your account with a predetermined sum; others simply reward higher amounts with greater interest rates right off the bat. Later on, banks may or may not require that you maintain a certain minimum balance at all times. In some cases, the minimum initial deposit may be waived if you already have a longstanding relationship with the bank, or multiple accounts open with the bank. Other times, you may be able to pay a startup fee instead of placing a higher initial deposit into your money market account. But it does usually help to save up first.

2. Always keep emergency funds in a back-up account. Just because you’re opening a money market account, this doesn’t mean that you should close preexisting savings or investment accounts. It may be tempting to consolidate all of your money and put it into the account with the highest predictable yield, which is likely going to be your money market account, but you could wind up in a jam if you encounter a financial emergency. That’s because you’re restricted as to how many times you can withdraw from your account each month and how much you must leave in the account at any given time. Violating any one of these restrictions can wind up costing you steep sums in terms of penalties, so you may want to have money put aside somewhere that’s easier to access just in case.

3. Follow up with your bank about interest rates. Once you’ve landed on a certain interest rate for your account, it may take time for you to negotiate a higher rate. But you should keep an eye on competitive rates to ensure that you’re getting a fair payout – especially if you continue to add funds to your account. At some point, you may qualify for higher rates at the same banking institution or with its competitor. Either way, don’t hesitate to contact a bank representative when you believe it’s time to negotiate a higher rate, either due to the seniority of your account or because the balance has risen significantly since the account was opened. Your bank should be willing to reward either of these milestones – and if they won’t, another bank is likely waiting in line to offer you high interest rates on your money market account.

Author: TM Murphy is a professional writer who lives in NYC. She currently specializes in fashion, beauty, marketing and finance articles. TM Murphy has been writing full-time since 2006, when she graduated with a B.A. in English from Northeastern University.

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