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By FinanceBuddy Staff Writer
A money market account is an account you deposit your money into with a pretty high rate of interest, but some require that your money stay in for a certain length of time. A checking account allows you to have the highest access to your money with the fewest restrictions. Just below this in terms of restrictions is the money market account. You get a higher rate of interest while maintaining some liquidity. You usually have limited access to it. For example some you can only write 3 checks a month. A money market account is usually a temporary holding account for investments, not to be used in lieu of a checking account. The biggest problem with money markets are that they have restrictions. Usually you can only make a certain amount of transactions per month. This is usually five or less. Also, you usually have to maintain a certain balance in the account so that you continue to receive the higher interest rate. Some banks require only $500, while others want a much higher balance. Money market accounts are basically special kinds of savings accounts that you can open at any local bank. Sometimes when you take money out of the account you can be penalized. In order to have a money market account you must have a minimum amount in order to get one. The more money you can keep there and put in the better the rate. A money market account is very safe but doesn't have a very high rate of return. A short term CD may be better. A CD has a guaranteed rate or return while a money market account does not. A money market account doesn't offer a fixed interest rate. The only thing is that with a CD you must leave your money in there and not touch it, while with the money market account there are restrictions but it's more liquid.