What are the pros and cons of having a money market account?

Question

I'm thinking of getting one. I'm undecided please help.

Answer 1

Pros - I have never heard of them losing money except by inflation, and when inflation is high, they tend to have higher returns

Cons - they don't make much. You can get 5.02% in PayPal Money Market right now...

If you have it at your bank, with enough money, you can probably get free checks and a free safe deposit box.

Answer 2

Pros:
1. Higher interest rates than saving account
2. Encourages saving.

Cons:
1. Must maintain a minimum balance, (usually over 1000$)
2. Very limited liquidity, (availability of funds is very limited)
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Personally, I hate savings and money markets. The average rates are only 5%. Now with inflation being around 4% per year, you will lose 4% due to inflation, and gain 5% of interest. That is a 1% gain, which is not much at all!!

I think you are looking to invest your money, and just don't know how. Savings accounts are not the way to do it. Saving and Money Markets are really purposeful for keeping funds you don't want to risk by investment in other more risky things, like the stock market. A good example is an "Emergency Fund".

I really don't think you want to put the over 1000$ required for a money market, in the account to sit idle, barely gaining anything. I suggest you invest in mutual funds, and stocks. Stocks aren't as risky as it seems, especially if you become well-informed about the stock market, and how it works. PLUS, instead of earning a measily 5%, you can earn on average 8-12%, more if you do it right. Of course, you might lose money, but if you stay the course for 5-10 years, you are garenteed 100% that you will get returns on your investment, especially if you invest in MUTUAL FUNDS, which are the safest and best way to invest in the stock market.

Look at the links below. One is a beginners investment guide, the other is the site I use to invest.

Answer 3

pros you can have access to the money by writing a check

con the check usually has to be for a certain amount (usually at least $500.00)

Pro account will make more interest that a regular checking or savings account.

con - the account will not make as much interest as some bank . for example ING the online bank offers something like 4.25 interest and CD can sometimes make up to 5% interest. you have to shop around

Answer 4

This Site Might Help You.

RE:
What are the pros and cons of having a money market account?
I'm thinking of getting one. I'm undecided please help.

Answer 5

This Site Might Help You.

RE:
What are the pros and cons of having a money market account?
I'm thinking of getting one. I'm undecided please help.