Best Money Market Accounts
These days, business owners have plenty of options for managing and optimizing their finances, including a wide range of options for commercial lending and deposits. In fact, many of the products available for businesses are largely the same ones individuals might open to build their own personal savings via interest—including interest-bearing checking and savings accounts, money market accounts, certificates of deposit (CDs), and more. This article will offer a quick overview of these options, including their key advantages and interest-earning potential.
Where Can I Put My Money to Earn the Most Interest?
Business owners looking to make their extra cash work both smarter and harder for them—by building interest—have several options to consider. At Indiana Members Credit Union, for example, we offer a wide range of products that can help businesses deposit funds and build meaningful interest. Among these are:
- Business Savings Accounts | IMCU’s Business Money Market Savings account is an ideal option for businesses looking to earn competitive interest rates on their deposits. (We’ll cover these in more detail shortly.)
- Business Certificates of Deposit | IMCU’s Business Certificates of Deposit are a versatile option, with terms ranging from 6 months to 7 years.
- Business Checking Accounts | IMCU offers several types of business checking accounts, including:
In order to identify the right solutions for their unique needs, businesses often opt to work with a credit union rather than a traditional bank or lending institution. At IMCU, we put our members’ needs first. Based on those needs, our team can help you explore your options and find the best interest-earning vehicles for your business finances. Because credit unions are member-owned, not-for-profit institutions, you can trust that your interests will always come first. Their primary purpose is to support their members and to help them make the best financial decisions for themselves, rather than maximizing their own revenue.
How Does a Money Market Account Work?
Like a savings account, funds deposited in a money market account are NCUA-insured, and provide the opportunity to make deposits, transfers, or withdrawals as needed. At the end of each month the account is active with a qualifying balance, that balance earns interest. The higher the balance, the more interest it accrues.
Do Money Market Accounts Have High Interest Rates?
Yes, compared with an ordinary business savings account, favorable money market account interest rates are a key advantage over traditional business savings accounts.
Is a Money Market Account FDIC Insured?
Yes! Whether offered through a credit union or traditional bank, money deposited into a money market account is insured, up to $250,000 by the FDIC—or, through a credit union, by the NCUA. This covers the accounts’ funds in the event of a bank collapse.
Is a Money Market Account Better than a Savings Account?
Typically, yes. While a money market account may require your business to meet minimum balance and/or deposit requirements, as soon as you make a qualifying deposit to fund your account, it starts building interest. For a money market account, the typical interest rate will generally be higher than you are likely to find with other comparable products.
What Are the Rules for a Money Market Account?
While money market accounts “usually limit the number of transactions you can make by check, debit card, or electronic transfer” (as noted by the Consumer Financial Protection Bureau), the account holder typically can “make a small number of withdrawals and payments by using an ATM or by making the withdrawal in person, by mail, or by telephone.”
Which Is the Best Money Market Account for Earning Interest?
It’s best to do your research before choosing a money market account, since interest rates fluctuate rather widely due to a number of factors. But generally speaking, money market accounts are a great way to build significant interest over time, while making funds available for easy withdrawal as needed. As NerdWallet notes, while the national average rate is less than 1% (0.63%) APR the best money market checking accounts can build more.
Interest rates, of course, vary over time—but at the time of this writing, IMCU’s business money market accounts offer between 1.50% and 2.73% interest, depending on the balance you maintain. See current rates here.