Posted by: Violet7 March 5, 2012
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Dear Caco,
A money market account is like a savings account but the difference is that they usually pay higher interest and require a higher minimum balance. If you open a money market account, please don't go below the mimimum balance required because if you do, those bastardss will starting charging you monthly fees. I know this cause my eyes nearly popped out when I logged in and saw that my account balance was negative.
Someone mentioned certificate of deposit(CD). CD is different from a savings account in that it has a fixed term(6months, 1year, 5 year) meaning you have to invest money for a fixed period of time. Lets say you get a 5-year CD and you invested $5000. At the end of 5 years, when you redeem your CD, you will get the money you originally invested and the interest but if you try to get the $5000 before year 5, there is a penalty. Usually the longer you invest, the higher the interest rate but it might not always be true. I attached the rate chart to give you a rough idea but please dont ask me which bank offer those rates cause right now I dont know any banks that offer such good rates on CDs.
Oh another thing Caco, interest rates and dividends are different hai. You get interest from your banking accounts or when you invest in CDs. You get dividends when you invest in stocks but not all companies pay out dividends. If you dont know a lot about investing in stocks, i think mutual funds are the best way to go about.
Overall, I think a money market account is a safe option because a lot of them are FDIC insured but you gotta make sure it is FDIC insured. Don't come scream at me if you lose your money. But is money market account the best option out there, I sure as hell dont know.
Sincerely,
Violet
A money market account is like a savings account but the difference is that they usually pay higher interest and require a higher minimum balance. If you open a money market account, please don't go below the mimimum balance required because if you do, those bastardss will starting charging you monthly fees. I know this cause my eyes nearly popped out when I logged in and saw that my account balance was negative.
Someone mentioned certificate of deposit(CD). CD is different from a savings account in that it has a fixed term(6months, 1year, 5 year) meaning you have to invest money for a fixed period of time. Lets say you get a 5-year CD and you invested $5000. At the end of 5 years, when you redeem your CD, you will get the money you originally invested and the interest but if you try to get the $5000 before year 5, there is a penalty. Usually the longer you invest, the higher the interest rate but it might not always be true. I attached the rate chart to give you a rough idea but please dont ask me which bank offer those rates cause right now I dont know any banks that offer such good rates on CDs.
Oh another thing Caco, interest rates and dividends are different hai. You get interest from your banking accounts or when you invest in CDs. You get dividends when you invest in stocks but not all companies pay out dividends. If you dont know a lot about investing in stocks, i think mutual funds are the best way to go about.
Overall, I think a money market account is a safe option because a lot of them are FDIC insured but you gotta make sure it is FDIC insured. Don't come scream at me if you lose your money. But is money market account the best option out there, I sure as hell dont know.
Sincerely,
Violet