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Simple English definitions for legal terms
money-market account
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A quick definition of money-market account:
A money-market account is a type of bank account that earns interest. It's like a piggy bank that you can put your money in and it will grow a little bit over time. But, you can only take out a limited number of times each month. It's a good place to keep your savings safe and earn a little extra money.A more thorough explanation:
A money-market account is a type of bank account that pays interest on the balance. It is similar to a savings account, but usually offers a higher interest rate. However, there are limits on the number of transactions you can make each month.
For example, let's say you deposit $10,000 into a money-market account that pays 2% interest. Over the course of a year, you would earn $200 in interest. However, if you try to withdraw money from the account more than six times in a month, you may be charged a fee.
Money-market accounts are a good option for people who want to earn interest on their savings but still have access to their money. They are also considered a low-risk investment because they are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per account.