STYLETHREAD -- LET'S TALK SHOP!

BargainQueen wrote:

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In plain English? 

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a savings account with higher interest.  Techincally you can write a check on them.  You get 6 withdrawls per month before there is a fee.  There is a minimium balance of 2500 required.  There are different tiers of interest rates.  The more money you have in there (I think 10,000) you hit the next tier and the rate is higher.  I use to work at a bank and opened these all the time.  Let me know if you have any other questions.

LexNVA wrote:

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Not all money markets have a minimum of $2,500. The bank I work at the minimum is $1000 and, you can actually have less but then you get charged a service charge which pretty much defeats the purpose because it's probably your interst plus some going down the drain.

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Ya, sorry I should have been more clear.  You can put any amount into them, but below the amount there is a service charge- making it not worth it.  All money market rules are going to be the same because these are federally mandated accounts.  The thing that changes from bank to bank is the interest.  This is all what I was told when I worked at the bank.  Here is what I found on howstuffworks.com:

A money market account is a type of savings account offered by banks and credit unions just like regular savings accounts. The difference is that they usually pay higher interest, have higher minimum balance requirements (sometimes $1000-$2500), and only allow three to six withdrawals per month. Another difference is that, similar to a checking account, many money market accounts will let you write up to three checks each month.

I thought it was mandated to be at least $2500, but thats not correct.  I learn something everyday!!

-- Edited by HeatherLynn at 21:57, 2006-02-01

Your money (up to 250,000) is FDIC insured.  It is not like you are buying stock or anything.  It is your standard savings account in that aspect.  If you have over the balance it could put you into the next tier of interest, and you would have a higher apr.  As far as maintence fees, I assume that varies from bank to bank, but I do not know of any that have maintence fees for these accounts.