MMAs are liquid accounts in a depository institution (bank).
•
Offer check-writing
and money-transfer privileges (often have
minimum requirements, limitations and fees).
•
MMAs are available
at most banks or credit unions.
•
Deposits
to the accounts may be insured
by the FDIC up to $100,000
for non-retirement and $250,000
for retirement accounts.
•
A minimum
balance is required, may be higher than the
balance a savings account requires.
•
Some online
institutions ofter high-yield MMAs which offer
better rates for higher risk.
For best local
rates: Go to Bankrate's
rate table for MMAs and search by state. For best national rates: Go to Bankrate's
rate table for MMAs and search by 100 highest
yield.
Money market mutual funds (MMFs)
Money market funds:
•
MMFs are not
FDIC-insured because they are not sold by regulated despository institutions (banks).
•
Offer check-writing
and money-transfer privileges (often have
minimum requirements, limitations and fees).
•
Withdrawals
may have fees.
•
Are mutual funds invested in safe, short-term debt securities.
•
Fees (expense
ratio) are included to cover fund management.
•
Are available as either taxable
and tax-free funds.
For best rates:
Go to Bankrate's
rate table for MMFs and click click on "taxable"
or "tax-exempt."
