Getting the best of both worlds sometimes requires compromise. But when it comes to bank accounts, money market accounts combine the easy access of a checking account with the higher interest rate of an online savings account. A money market account can let you write checks and earn a competitive APY on your money in a single account.
It used to be that to open a money market account -- or a regular checking or savings account -- you had to visit a physical branch location. Online banking makes it possible to open accounts digitally in just minutes. Also, some banks make it worth your while with lucrative promotional bonuses that can put extra cash in your pocket.
If the idea of using the internet to open an account seems daunting to you, you're not alone. But the process is secure and relatively easy. As long as you know what to expect, you'll be up and running in no time. Below, you'll find a simple guide to how to open a money market account.
1. Find the best money market account for you
If you want to open a money market account, the first step is finding the right bank. There are dozens of online banks vying for your business. They've been so successful that most well-established brick-and-mortar banking institutions have also set up an internet presence to accept online applications.
To find and open a money market account that fits your goals, you need to understand what makes one account better than another. In comparing your options, here are a few things to consider in your decision-making:
- Most money market accounts work the same way. You're typically able to write checks as part of an allotment of six check-based or electronic withdrawals per month. Most offer debit cards to provide you with additional access to your money.
- The biggest differences between accounts at various banks are what interest they pay and what fees they charge. Ideally, you want the highest rates and the lowest monthly fee. Several online banks don't charge a monthly fee on money market accounts.
- Some banks have tiered rates that can result in a much lower interest rate if your balance is too low to qualify for a better yield.
It's also worthwhile to look for promotional offers for opening a money market account. Some of these are worth hundreds of dollars, and although they typically have requirements you might not be able to meet, it's worth pursuing when you're looking for the best banking option.
2. Fill out and submit an online application
Filling out paperwork to open a bank account has been a hassle for years. Recent regulations have made it even more complicated. Now, you have to bring the right kind of ID to a bank branch to comply with anti-fraud and anti-money laundering regulations. If you show up without the proper documents, you have to head back home to retrieve them.
Online applications have changed that. Now, you can open a deposit account anywhere you have access to the information you need for the bank. That typically includes:
- Full name
- Physical address
- Date of birth
- Social Security number
- Driver's license
Opening an account at a bank where you already have a relationship can sometimes save you time -- the bank's online application may start filled in with much of your information.
The big benefit of online applications is that you're often approved in minutes. Then you only need to do one more thing before your account is open and ready to use.
3. Fund your money market account
Once your bank has approved your money market account, you need to deposit money into it. Most banks let you move money electronically from another bank account, whether it's at the same bank or a different financial institution.
You typically need the routing number of the other bank and the account number you're moving money from. The bank's online platform initiates the fund transfer process. The best banks take care of account funding when they approve your account application. That way, there's no delay in getting you started.
Other than electronic funds transfer, most banks let you mail a check, wire money to them, or even bring cash to a physical branch location if they have one. These options typically carry extra fees. 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. It typically takes only a few days before you'll have full access to your money via check-writing, ATM withdrawals, or other methods.
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 takes some time to receive paper checks. You may also have to wait for a debit card to arrive. However, most banks offer online services like bill pay to put your account to work right away.
Having a money market account could eliminate the need for another checking account.
It might seem intimidating to share sensitive personal information over the internet to open your bank account. Today, online banking is easier and safer than ever. Now that you know how to open a money market account, you can start enjoying one of the most versatile types of bank account available. Follow these simple steps, and your money market account can start working for you as soon as possible.
About the Author
Kevin Payne is a personal finance writer specializing in credit cards, banking and student loans. He is a regular contributor to Forbes, Student Loan Planner, and FinanceBuzz. Kevin is the budget and family travel expert behind FamilyMoneyAdventure.com. He lives in Cleveland, Ohio with his wife and four kids.
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