Over the last year or so, I’ve been looking for an investment account that offers a higher interest rate than a typical savings account, but still leaves my funds somewhat liquid in case I need them. Recently, a friend suggested I might want to look into opening a money market deposit account. So I decided to do some research—and found out that a money market account is actually a pretty cool investment tool!

"Money Market Account” defined 

A money market account is a great option if you want your savings to grow quickly and you don’t need to have instant access to saved funds.

  • Definition: An interest-bearing account that typically pays a higher interest rate than a savings account, and which provides the account holder with limited check-writing ability. (For more see Investopedia.)

Key features:

  • Low risk
  • Medium liquidity
  • FDIC insured
  • Features of both a savings and checking account with check-writing privileges

Note: Do not confuse a money market account (what we are discussing here) with a money market fund (this account works more like a mutual fund).

What not to do when opening a MMA

Here are three common—and expensive!—mistakes people make when opening a new MMA.

1. Skip reading the fine print about fees.

Just like a checking or savings account, money market accounts come with a set of fees attached. Each bank or credit union can set their own fees. Be sure to compare fees (especially the following) before selecting a MMA.

  • Minimum balance fee: the fee you pay if your account falls below the minimum balance.
  • Account maintenance fee: the fee you pay for administrative services.
  • ATM fee: the fee you pay for using an ATM to make deposits and withdrawals.
  • Copy fee: the fee you pay to order copies of your past statements.
  • Returned deposit/check fee: the fee you pay when your deposit check bounces.
  • Stop payment fee: the fee you pay to stop a payment check.

2. Disregard transaction limits.

One of the easiest ways to cancel out what you earn in interest with your MMA is to ignore transaction limits. These are imposed by law—legally, a MMA account cannot permit more than 6 transactions per statement period (typically 30 days).

  • Example: Let's say you go with Ally Bank, which charges a $10 fee for excessive transactions (any over 6 per 30 days). You make 10 transactions, and pay $40 that month in fees. And if you continue to exceed permitted transactions, the bank will be legally required to close your MMA.

3. Ignore the "minimum balance" requirements.

Today, some money market accounts will waive minimum opening and minimum ongoing balance requirements. If you think this will be an issue for you, be sure to research which MMA accounts offer this waiver before you open an account!

  • Example: Let's say you select EverBank, which charges a $5 monthly account maintenance fee that is waived if you keep at least $30 in your account on a daily basis. You fall below the minimum balance 10 days out of the past 30. So you pay $50 that month in fees.

Top 5 MMAs of 2015 

If you’re researching the best money market deposit accounts, these five top the list for 2015!

1. Ally Bank MMA

2. Synchrony Bank MMA

  • Interest rate: 0.85% APY
  • Website: https://www.myoptimizerplus.com/banking/products/money-market/index.htm?UISCode=0000000 (Use their easy online "calculate your earnings" tool to calculate what you will save in a year at different balances!)
  • Balance minimu: N/a
  • Limitations: Keep $30 in your account all the time or pay a $5 account fee monthly.
  • Fees: $20 for each withdrawal over the allowed 6 per month.
  • Perks: Easy online and mobile banking.

3. EverBank MMA

  • Interest rate: 1.01% APY first 12 months; 0.61% APY after.
  • Website: https://www.everbank.com/banking/money-market
  • Balance minimum: $1,500
  • Limitations: N/a
  • Fees: No monthly fee.
  • Perks: This MMA is IRA-eligible, which means you can open it as an IRA savings vehicle (tax deferred); mobile check deposits; up to six transactions per statement.

4. Sallie Mae MMA

5. ableBanking MMA

  • Interest rate: 1.00% APY
  • Website: http://www.ablebanking.com/saving.aspx (Use their easy online "savings forecaster" tool to calculate what you will save in a year at different balances!)
  • Balance minimum: $250
  • Limitations: No check writing privileges.
  • Fees: Some of the fees are higher than standard ($30 for overdraft; $20 for incoming wire transfer; see additional fees).
  • Perks: The bank will send a $25 gift to your charity of choice when you open an account.