Published in: Banks | Feb. 1, 2019
How to Open a Money Market Account
By: Dan Caplinger
If you like the access of checking accounts and the higher rates of savings accounts, opening a money market account might be your best bet.
Getting the best of both worlds sometimes requires compromise. But when it comes to bank accounts, money market accounts give you the ability to get the easy access to your money that checking accounts offer along with the higher interest rates that banks have typically reserved for savings accounts. In a single account, a money market account can let you write checks and earn competitive rates on your money.
It used to be that in order to open a money market account -- or any other type of bank account -- you had to go in and visit an actual physical branch location. Now, though, online banks make it possible to open accounts in just minutes through simple internet-based application. In addition, some banks make it worth your while with lucrative promotions that can put extra cash in your pocket.
If the idea of using the internet to open an account seems daunting, you're not alone. But the process is both secure and relatively easy, and as long as you know what to expect, you'll be up and running in no time. Below, you'll find a simple guide along with the steps you'll need to follow in order to get your new money market account.
Step 1: Find the best money market account for you
You'll find dozens of online banks vying for your business, and they've been so successful that most well-established brick-and-mortar banking institutions have also set up an internet presence of their own to accept online applications. To help you find the best money market account available, you need to understand what makes one account better than another. In comparing your options, here are a few things that should help guide your decision-making process:
- In essence, most money market accounts work the same way. You're typically given the ability to write checks as part of an allotment of six check-based or electronic withdrawals per month. Most offer debit cards to give you additional access to your money.
- Because of that, the biggest differences between accounts at various banks are what interest you'll get paid and what fees you'll get charged. Ideally, you want the highest rates and the lowest fees you can get.
- It's especially important to look for potential "gotchas" that banks sometimes use to boost fee revenue. Among them are items like inactivity fees for not doing enough transactions regularly, paper-statement fees for not using electronic statement delivery, and maintenance fees if your balance falls below a certain level. Also, some banks have tiered rates that can result in your getting a much lower interest rate if your balance is too low to qualify for better treatment.
- Know how to get help. One challenge with online-only banks is that you're at the mercy of whatever remote customer service options they offer, whether it's contact by phone, email, online chat, or some other method. If you really want face-to-face contact, then you'll want to go with a bank that has both online and physical branch locations to serve you.
It's also worthwhile to look for promotional offers that banks will give to get you to open a new money market account. Some of these are worth hundreds of dollars, and although they typically have requirements that you might not be able to meet, it's still worth pursuing as a way to find your absolute best banking option.
Step 2: Go online and fill out a money market account application
Paperwork to open a bank account has been a hassle for years. Regulations have made it even more complicated recently, with the need to bring the right kind of ID to a bank branch in order to comply with anti-fraud and anti-money laundering regulations. If you don't know in advance what you'll need, you'll often end up having to go home to get missing documents before returning to get the account opened.
Online applications have changed that. Now, you can open the account at home, where you have easy access to the information you'll need in order to satisfy the bank. That typically includes name, address, date of birth, Social Security number, driver’s license or passport, and other related personal information. If you're looking to open an account at a bank where you already have a relationship, it can sometimes save you precious time, as an online application can often fill in existing information into the new application.
The big benefit of online applications is that you're often able to get approval in minutes. Once it's approved, you'll just need to do one more thing before your account is open and ready for you to use.
Step 3: Fund your money market account
Once your bank has approved your money market account, you'll need to deposit money into it. Most banks will let you move money electronically from another bank account, regardless of whether it's at the same bank or with a different financial institution. You'll typically need to have both the routing number of the other bank and the account number you're moving money from, and the bank's online platform will take care of getting the wheels rolling to transfer the funds. The best banks take care of account funding at the same time that they approve your account application. That way, there's no delay in getting you started.
Other than electronic funds transfer, most banks will let you mail a check, wire money to them, or even bring cash to a physical branch location if they have one. Some of these options typically carry extra fees, though, so be sure to ask before you incur a charge you don't want to pay.
Once you've made your deposit, be prepared for your bank to put a temporary hold on the money you've put in. It typically takes only a few days before you'll have full access to your money via check-writing, ATM withdrawals, or other methods.
Step 4: Start using your new account!
As soon as your new money market account has money in it, you can start using it. Typically, it'll take some time for you to receive paper checks you can use for check-writing purposes, and you might also have to wait before a debit card arrives. However, most banks offer online services like bill pay to put your account to work right away even before those items come in.
Don't be afraid
It might seem intimidating to share sensitive personal information over the internet to get your bank account opened, but it's easier and safer than ever. By following these simple steps, your money market account will start working for you as soon as possible.
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