What are the pros and cons of a MMA?
Are there different ones?
I always see advertisements for a 3-4% return, like it's a interest bearing savings account, but only see maybe 1% in interest every month. What gives?
Money Market Accounts
October 6th, 2008 at 01:30 pm
October 6th, 2008 at 02:46 pm 1223304401
So, is this something offered by a bank, or a mutual fund company?
Assuming it's a bank, it's just a savings account. It'll pay 3-4% total over the course of a year. However, it pays the interest in monthly increments, so it's whatever that total is divided by 12 AND because it's in APY, it's an interest rate that also assumes you're going to leave the principle as well as interest in there to compound to get that interest rate.
Hope that helps.
October 6th, 2008 at 03:26 pm 1223306793
There isn't any rick in MMA's right? Isn't it the same as having it in a bond fund.
Thanks for helping...and I will browse the forums.
October 6th, 2008 at 07:55 pm 1223322906
Money market mutual funds are similar to bond funds, except that money market ones are designed to be short-term and easy to liquidate. Plus, money market mutual funds are not always invested in bonds, whereas I believe bond funds are.
However, that should also not be confused with a bank savings account, even if it's titled as, "Money Market Savings". Legally, it's still a regular bank account.
October 6th, 2008 at 08:54 pm 1223326448
So they all seem similar, what would you recommend for low risk/better than your standard interest bearing savings account?
October 6th, 2008 at 11:59 pm 1223337586