Shopping for Money Market Accounts

When you open a money market account, as the song says,
you’d better shop around. On any given day, certain banks
may try to attract deposits. Those banks often offer money
market accounts that yield over 5%, although the average
yield nationwide is more in the range of 2.5%. In many cases,
the yield also depends on the amount you deposit.

The first step in opening a money market account is to decide
which type best suits your needs. Money market accounts
come in three types:

 The basic money market account: These usually
require a
minimum opening deposit of $
100.
The “tiered” money market account: These often
require a
minimum opening deposit in excess of $
100
and pay a higher yield than most basic accounts. For
example, you might earn 2.5% interest with a $500
account balance, but as much as 5% interest or more
with a balance of $50,000.

 The package deal: This is a money market account coupled
with a savings account, certificates of deposit, and
other bank investments. Because the package deal utilizes
several products, banks and credit unions may offer
a slightly higher yield than they do for basic or tiered
accounts. What’s more, the minimum deposit may be
waived.