Here is a link to Bankrate.com where they give you a nice way to sort the possibilities out. I look for banks who have been around a while (many over 100 years). Even though I will never go there, I sort of like the idea of bricks and mortar; but great multi-national financial institutions should also be considered.

Do you have $5000 or $10000 to start with? If not, there are many who will start an account with a zero or $1 balance. I also look for a permanent rate, not just a 3 month or 6 month introductory rate.

I have also noticed some new ones on the scene who will give you a great rate if you do direct deposit of your paycheck and pay at least two bills a month using their bill pay feature. I don't like anything that tells me I have to agree to certain rules to get their rate when there are those out there who will let you do whatever you want.

Personally, I have used one for about a year and a half and have been pleased with them, but click below and decide what makes sense for you.

Money Market High Yield ( MMA ) and Savings Account Rates

Thanks, Dru... good advice. I've heard a lot about ING but that's one that I put aside, thinking I didn't have enough info about. Definitely needs to be well established with a track record, yes.

Well yes, but I'm not really sure we want to put it all into one basket at this point. As far as the low balances go, I was under the impression that 10k was needed for MMA. Or maybe that's just the bank I checked for it. Interesting.

That's the kind that really give me the heebies. And if the name isn't well established, I won't even check into them.

I will, thanks. Has there ever been a time when something went wrong (or slow) with them where you questioned the decision to use them?

It takes a couple of days to transfer money back and forth, but that is a plus to me. If you could transfer instantly some less disciplined might use it frivolously.

I have been happy with the convenience of doing it all on line. You can transfer at will, or have automatic drafts set up, depending on your needs. I think this is how most of them work.

I looked at the website you suggested and it's surprising the difference in the interest rates. I was expecting to find them more or less the same so it was an eye opener. Great to have all that info in one place!

I agree with Dru.

Banks and Insurance companies are the wealthiest companies in the world. With that being said, there are a variety of choices out there, and Bankrate.com is a good way to sort them out. You can also go to AMBest.com to check financial stability ratings for a bank you may have never heard of.

If the bank has good ratings, then choose the account that pays the highest rate with the *least* restrictions. While I have more than $25k in savings, I didn't choose a money market fund with a minimum balance, even though they paid a slightly higher rate. I don't want to have to worry about my account being closed because my balance was insufficient. The purpose of a money market savings account is LIQUIDITY, and restrictions only interfere with that.

I have one MMA and we're considering starting a second.... but I haven't
thought about (or heard of) a bank just closing one down. What happens when they do? Transfer to a low interest account you already have at the bank? What would you consider the 2 or 3 *worst* restrictions?

Not sure if the bank would do it, maybe Mark can answer that, but why have to worry about it? I'd think the bank would offer to move it to a savings or checking account, but I'm just guessing. It is also possible that falling below a minimum value would expose the account to certain fees.

(Keep in mind that a money market mutual fund is very different than a money market savings account. Some people get these mixed up, but they're entirely different ballgames.)

1. The most common restriction is high minimum balance, typically to avoid certain fees.
2. Another bad one is limited withdrawal transactions. They may limit you to so many per month or year, and discourage them with high fees or account closure if you do not comply. A variation of this would also be limited choice or long timelines for transfers in/out of the account.
3. Fees - Read about each and every fee. Banks use fees to discourage behaviors that interfere with their ability to meet their financial obligations. What this means is that if they don't want you to do something (and you want to do it), they will associate a high fee with it so you will avoid doing it. Take note of each and every fee and whether it seems reasonable. Compare fees to competitors. Fees act as restrictions.

With Money Market accounts, there are federal regulations that banks have to enforce. This is why there is a high minimum balance for most banks, people with a lot of money tend to take the time to protect it. If you do too many things in violation of what the government requires, a Money Market will either be turned into a no-interest checking account or a basic savings account (think .5-1.00% interest). A good banker may suggest a short-term CD or a laddered CD portfolio as alternatives in this situation.

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Never sign intellectual property agreements...

Yes, that sounds like what I understood with ours. We're allowed... I think it's three checks per month on the account, but we haven't had to use them luckily. I wouldn't be real pleased having it turned into a no interest account. I guess we must have a good one because there haven't been any fees yet... well, that I've noticed. They wouldn't dare hide fees in the interest earned, would they?

No, they have to disclose all fees to you ahead of time (usually in the form of a really long boring document that nobody reads). Make sure you keep your disclosures and note when they make changes to them (they will notify you in writing).

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Never sign intellectual property agreements...