What is a money market account and how do you track its activity?how is it better than stock-based mutualfund?

Answer 1

The "money market" is just what it sounds like. Some companies will find themselves short on cash on any given day, and will need to borrow some. We're talking IBM's, General Electric, etc. With a money market account, your money is essentially pooled with other people's money to make this loan... on an overnight basis. You're compensated with a rate that's tied to the short term interest rate.

As far as tracking the activity.... if you hold your money market account at a bank, you won't see all the ins and outs of the pool.. you'll just get an interest credit, probably once a month. The credit will be based on your average outstanding balance during the month... you can't game the system by putting money in there just before the calculation date.

Choosing a money market fund over a stock based mutual fund isn't necessarily better or worse, but depends on your objectives. If you want long term growth of your money (and the associated risk), a stock based mutual fund will reflect the returns of its underlying stocks. If you want your investment to be stable and income bearing, but with a limited upside, like for a rainy day fund, or if you're saving for a house, a money market account may be the way to go.

Hope this helps.

Answer 2

a money market account is like a savings account with higher interest, but you are required rto keep a minimum and you are limit to certain amount of transactions per month.

A mutual savings fund is basically letting the bank invest in the Stock exchange on different amount of companies, you may lose money but also you may make better interest, it all deppends on the risk factor you are willing to take. You will incure on penalties and high taxes if you withdraw the money.

If you are saving money for retirement or for at least 10 or more years that you are not going to need to withdraw it, then go for a mutual fund directed by a know investment company. If you have more than $10 000 on hand and probably won´t use it in less than a year or more, go for the money market.

In your local bank ask for the financial rep, he might direct you well, but he might also try to sell you the mutual fund because it is better commission for him, so watch out.

Answer 3

A money market account is, essentially, an account with a mutual fund that invests in high-quality short-term fixed income instruments (U.S. Treasury bills, U.S. Treasury notes and bonds with a few months until maturity, high-grade commercial paper, high-grade corporate bonds with a few months until maturity, etc.)

A money market account is not "better" or "worse" that an equity mutual fund. It's just different. Money market accounts have low expected return and very low risk. Stock funds have high expected return and high risk.

Answer 4

money market accounts are somewhat better than savings accounts, most are dependant on some money based index, with a yield that ties to increases or losses in whichever market the fund is based on.

They have less risk than mutuals and much, MUCH less potential for earnings

which is OK if you're CLOSE to retiring.

Answer 5

Money market accts gives you a % rate that can vary. Local bank now offers a 5.25%. This rate can go up or down but you never lose your initial investment. You can withdraw money anytime w/o any charge.
Stock based, you are charged a % to buy or when you sell. Mutual fund may go up 10% a year or you may lose 10% of your initial investment.

Answer 6

I am not sure what you mean by track the activity. Usually the monthly statement will show you the activity.

Here is an article about savings accounts that might help:

http://savings-accounts.yourinfopalace.com/Articles/High_Interest_Savings_Account.php

Answer 7

Give " COPITA " the 10 points . She got the perfect answer