Highest Money Market Rates
If you are looking to invest in money market securities, you should understand that there are actually two kinds. One kind is the straight money market account that is set up by an institution. The investor deposits his or her money and reaps the benefits from the investments of the single institution. The other kind is a money market fund account. Money market mutual fund rates are usually a bit better than rates on bank-based deposit accounts.
Money deposited in the fund-type instrument is invested in a number of money market offerings from different institutions or agents, thus spreading out risk by diversifying the investment. The highest money market rate will depend on which kind of account you are seeking.
FDIC Insured
You should also understand that your money placed into a money market account is FDIC
insured much as a regular savings or deposit account. That being said,
even without any FDIC insurance, money markets are considered one of the safest investment vehicles.
Few if any money market investments have lost more than a little value in recent financial history.
Sellers of money market instruments take great pains to keep investor confidence as high as possible.
Restrictions and Limitions
Some institutions that offer money market accounts impose minimum account balance requirements.
These amounts are usually around $1000-$2000. The highest account minimum requirements often
come with the benefit of the highest money market rate. Your money in the money market
account has the added benefit of being accessible by check writing or electronic transfers.
Similar Financial Instruments
The financial instrument that is most similar to a money market account is the bank savings account.
The interest rate on the savings account is usually just slightly worse than that of a money market account.
Moreover, the rate on a savings account is guaranteed. The money market rate is only a guess and
subject to fluctuations. So why do people want to use savings accounts? Well, a savings account is
FDIC insured. If the bank collapses, your investment is not lost! A money market account has a
slightly higher rate of return, but it can lose value. Even so, as we mentioned before, money
markets have very rarely lost value in recent financial history.
- 1. Bankrate's highest money market rates shows values divided into sizes of accounts. In other words, people who put 50K into a single account will get higher yields than those who put in 10K. The numbers differ by about 0.3%, which is substantial for large sums but not so great for small ones.
- 2. Bankaholic's highest money market rates shows an updated list every day with the bank name and the rate. It also gives the minimum amount needed to open an account, as well as the amount needed to avoid fees.
- 3. Money Rates's highest money market rate chart gives something similar to the above two but the first 3 are advertisements which makes it slightly more confusing to first-timers. In addition, the chart is inconveniently split across several screens.