Holly, NC (PressExposure) July 21, 2010 -- SBLR, known for their free financial information, has just released their latest report discussing business loan rates and high interest money market accounts.
"A high interest money market account is the perfect place to park some money that you would normally put into a savings account," says John Brown, owner of SBLR. "The money market account is usually available through most banks and credit unions. They are safe investment vehicles that are typically backed by the FDIC (federal deposit insurance company). The FDIC will guarantee your investment up to two hundred and fifty thousand dollars. This is a pretty good deal, low risk, nice return."
The report covers what makes investing in money market accounts different from other investment methods.
"The MMA, as it is commonly referred to, usually have some unique properties. They are much more liquid than other investment vehicles. They are in direct competition with money market funds that are traditionally offered by brokerage houses," says John."An MMA is much more flexible than a certificate of deposit, but usually requires a higher minimum deposit. The amount of the deposit will range from bank to bank, but it is usually quite substantial."
The report also discusses many of the benefits that are included in the money market investments.
"The liquid aspect and the higher rate are very attractive to most investors. Typically this type of account comes with the ability to write a specific number of checks each month. This is not a checking account, nor is it a savings account, although it is similar to both," says John. "Usually maintaining a high balance to collect the interest that is offered on the account is required, but the rate is usually quite reasonable, so it is well worth keeping the balance current. This is a safe vehicle that will see a much higher return than most savings accounts."
The report also covers some of the restrictions that come with investing in the money market.
"f course there are some restrictions that apply to this scenario. Usually the amount of checks that can be written are limited, to only a few per month, if you go over the number that can be written according to the agreement there are usually high penalties involved," says John. If you drop below the minimum balance you risk losing interest as a penalty. Keep in mind that this is not a savings account nor is it a checking account, it is an investment vehicle."
Click here to learn more about investing in the money market as well as other short term investments.