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Ask Dave

How Do I Find a Good Money Market Account?

Vincent asks how to find a good money market account.

QUESTION: Vincent on Twitter asks how to find a good money market account.

ANSWER: A real money market account that is really a money market is not at a bank. Bank savings accounts that have a rate approximating that are called money market accounts sometimes, but they’re not technically money market accounts.

I’ve got a real good one at my local bank. They do a good job on the float. I use it in business, and I use it personally as well to float, because I keep enough money over there that they give me a good rate on it. Then I also use a money market account at a mutual fund company. If you have a certain brand of mutual funds you have a lot of, you could open a money market account with them and just look at what those rates are.

Again, none of this is exciting. It doesn’t pay anything. The money markets you open with your mutual fund company—they usually issue a checkbook with them, so you have full check-writing privileges. So if you wanted to write a check out of it to buy something, just write a check like you would out of your checkbook. But it’s just a decent place to park money. It’s not great, just decent. The whole purpose is it’s safe and accessible because it’s insurance. It’s not an investment.