Posted by: Kiddo March 5, 2012
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20% in a MMA? Impossible.
MMA are a hybrid of checking and savings, from a consumer point of view. You can cut checks with it, but have some limitations on number of withdrawals and minimum balance. They pay relatively higher interest rate than saving account.
Banks and financial institutions make money from the fund you deposited in MMA, by investing that sum into government/private securities. In a typical saving account, they loan out the money you put in the bank to other entities. Interest they collect from those entities are then shared with you (obviously smaller interest goes to you). In MMA case, banks actually invest it in market (hence Money Market) securities.
For them to pay you 20% interest, they should be investing in a Burnie Madoff Triple fund.
Make sure you are reading it correct; it could be 2% not 20%.
MMA are a hybrid of checking and savings, from a consumer point of view. You can cut checks with it, but have some limitations on number of withdrawals and minimum balance. They pay relatively higher interest rate than saving account.
Banks and financial institutions make money from the fund you deposited in MMA, by investing that sum into government/private securities. In a typical saving account, they loan out the money you put in the bank to other entities. Interest they collect from those entities are then shared with you (obviously smaller interest goes to you). In MMA case, banks actually invest it in market (hence Money Market) securities.
For them to pay you 20% interest, they should be investing in a Burnie Madoff Triple fund.
Make sure you are reading it correct; it could be 2% not 20%.