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Money Market Checking Accounts

Money market checking accounts are slightly different from your regular daily use checking accounts. The reason that they differ is because their basic purpose is to help you to build your money by allowing it to earn interest. Thus, it has greater limits on the number of transactions that you can perform, including whether you are writing checks or transferring your money among your money market or checking accounts.

There was a time when checking accounts did not earn interest, and you could not check your account balance online. Bank and credit union customers were instead left to choose among various savings accounts that were available on the banking market. This allowed customers the ability to earn money on their money. The only drawback was that customers had to make a transfer or visit a bank branch to access their money. Money market checking accounts were at one time very popular among bank and credit union customers who wanted to marry the best of their checking with their savings accounts.

Background and Present Day Usage

Money market checking accounts require a minimum balance that is generally at or above the $1,000 mark. In addition, they earn interest, while allowing the customer to use it as a checking service. They can make a few transactions per month or per quarter. The maximum transactions are largely regulated by the Federal Reserve. Thus, the restrictions on transactions will be in effect, no matter what bank you choose to use.

The money market checking accounts was an answer to this call for a hybrid product. The Internet banking craze has created an outlet for interest bearing checking accounts to emerge. There is still room for the money market checking accounts, though, because many customers do not like to bank online, and still religiously visit their local bank branches to conduct their financial business. It is their own distrust of their personal security when electronic transfers and payments occur that drives this avoidance of Internet bank services.

Thus, there are still healthy volumes of customers still in the market for money market checking accounts. If you are among those banking customers who are in the market for money market checking accounts, look for a bank that has FDIC up to $200,000. Find a bank that offers both the healthiest interest rates and allows the lowest minimum deposit and also daily average balance. The key is to avoid paying fees, because your main aim if you are in the market for money market checking accounts is to earn interest.

Fulfilling Your Banking Needs

It is likely that if you are in the market for something like this product, you would like to earn some interest on your financial funds but enjoy greater accessibility as well. It is important to ask yourself your savings needs, and the range of savings goals. You may have, for instance, long range savings vehicles such as your retirement savings. In addition, you may have an emergency fund that you keep rolling over into Certificates of Deposit every year or so. These both earn interest, hopefully, and allow you to meet longer-term and long-term goals.

The CDs allow you flexibility but penalize you if you want to access your funds prior to the expiration of the terms of agreement. The regular savings vehicles will not supply you with a means to make purchases in person. You can certainly make electronic payments from a savings to your utilities, for instance. The reason you can do this is because it is technically an electronic payment. Actually, both your regular savings and your other banking are all the same with regard to them all now being electronic. Banking rules changed in the early to mid-2000s that made even checks an instantaneous form of payment.

At one time, checks were routed back to the customer's bank and this took days at a time. It allowed customers a cushion, or float period before the funds were withdrawn. That is no longer the case. All banking is basically electronic, even if you will not use the Internet to manage your personal finances. It is up to you how you will keep up with the changing banking climate as a consumer. You may warm up to the Internet eventually, as more and more of our funds are treated as electronic currency.

If you are warming up to the Internet, then you may want to compare money market checking accounts and their interest rates with all other vehicles. Also, ask yourself what you want the funds to do for you. It may be that you are saving for vacation and want to avoid depleting the savings. Such restrictions on spending help many consumers to hold onto the currency for when they intend to use it. This includes saving up for vacation. You maintain liquidity that is not as readily found with CDs.