Disadvantages of a money market account

You could lose money in one of them, their typically not FDIC insured.

Quote from BigBobSaget : You could lose money in one of them, their typically not FDIC insured.

Incorrect, straight from the FDIC:

"FDIC insurance covers all deposit accounts, including checking and savings accounts, money market deposit accounts and certificates of deposit."

A money market account allows you to write checks, but there are also limitations on the number of withdrawals, 6 per month.

...also, straight from Ally:

http://www.ally.com/bank/money-market-account/

Look at asterisk #8.

I understand that, but that same restriction is on every savings account as well. How is a money market not strictly better than a savings account, given that at least in this case, they have the same interest rate?

I am assuming the money market has a minimum balance requirement and the savings account doesn't? I don't know much about Ally, but I assume their money market rates are also tiered; the higher the balance, the higher the interest rate. Whereas, savings may have no minimum balance, but stuck at a low rate.

Edit: Above is how a typical bank works between the two accounts. After looking at Ally, they look identical, except what you mentioned of being able to access your money easier with a money market.

Quote from jambster : I am assuming the money market has a minimum balance requirement and the savings account doesn't? I don't know much about Ally, but I assume their money market rates are also tiered; the higher the balance, the higher the interest rate. Whereas, savings may have no minimum balance, but stuck at a low rate. Edit: Above is how a typical bank works between the two accounts. After looking at Ally, they look identical, except what you mentioned of being able to access your money easier with a money market.

Can't speak to Ally, but generally MM accounts allow you to write a min number of checks per month and savings accounts do not. They are sort of in the middle between a full service checking account and a straight savings account though the lines are very gray in that respect. Rates can vary. Just look at the particular terms of each of the accounts and pick the one that best suits your need. All should be federally insured if from an insured bank so it really just comes down to the rate, min balance, check privilege and fees.

In the clauses and Terms and conditions, they determine if you are allowed to withdraw or not from the account. They can suspend your account at will. This will occur with the next Great Depression. Everyone will scramble to withdraw money from 401ks, Money Market accounts, etc, but won't be able to.

Quote from ViciousTide : In the clauses and Terms and conditions, they determine if you are allowed to withdraw or not from the account. They can suspend your account at will. This will occur with the next Great Depression. Everyone will scramble to withdraw money from 401ks, Money Market accounts, etc, but won't be able to.

That's pretty silly.

Quote from vaultaddict : That's pretty silly.

http://www.citizensbank.com/savin...vings.aspx

*Annual Percentage Yield
Rates accurate as of 1/17/2013 and subject to change before or after account opening. Rates apply to new accounts and may not apply to existing accounts.
All accounts, loans, and services are subject to individual approval.
See a banker for details. Other fees may apply.
Fees may reduce earnings. See a banker for details and transaction limitations.

Any FUND can be held at the request of the FUND Managers approval for whatever reason they desire.

Why is it that Hedge Fund Managers still make $2 Billion annually even during depressions and mass financial panics?

The public thinks their money is "Safe".

Quote from ViciousTide : http://www.citizensbank.com/savin...vings.aspx *Annual Percentage Yield Rates accurate as of 1/17/2013 and subject to change before or after account opening. Rates apply to new accounts and may not apply to existing accounts. All accounts, loans, and services are subject to individual approval. See a banker for details. Other fees may apply. Fees may reduce earnings. See a banker for details and transaction limitations.

That's no different from a savings account though. My question is how is a money market account not strictly better than a savings account?

Lot of stupid is running rampant in this thread.

1. Money market (brokerage)
   • NOT FDIC or NCUA insured (there will be huge warnings about this)
   • expenses/management fees
   • 6 withdrawal / month limit
   • Usually only at brokerage firms (etrade, vanguard, fidelity, etc)
   • higher min balance
2. Money market (deposit)
   • 6 withdrawal / month limit
   • higher min balance
   • maybe fees
3. Savings
   • May have 6 withdrawal / month limit
   
   

People are confusing #1 with #2. Today #2 and #3 are basically the same thing; some have checks, atm cards, etc for one or both. 9 times out of 10 the money market (even the deposit type) are worthless.

IMHO, get a high interest savings account with free ACH push and pull.

^ Ally has no minimum balance and no unreasonable fees, so it seems strictly better.

Either way, watch out for Bank's Foreign Transaction Fees of 3% or higher. This includes withdrawing overseas.