Money Market Account Smithtown NY

Money market accounts are used for short-term borrowing and lending on money. This type of account, offered by banks and credit unions, is just like a regular savings account; however, there are some slight differences. The rates, amount of withdrawals, and types of accounts allowed under the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA) are varied and will be explained further.


1 . Local Companies

Ms. Sandra Grinspan, CFP®
516-933-7666
1895 Walt Whitman Rd
Melville, NY
Mr. Scott Kaplan, CFP®
631-274-4737
2180 Louis Kossuth Avenue
Ronkonkoma, NY
Gerard Barrasso
United Financial Planning Group, LLC

(631) 234-0871
888 Veterans Memorial Highway, Suite 530
Hauppauge, NY
Joyce Streithorst
Frisch Financial Group, Inc.

(631) 271-7900
290 Broad Hollow Road, Suite 130E
Melville, NY
Ronald Roge
R.W. Roge & Company, Inc.

(631) 218-0077 Ext: 210
630 Johnson Avenue, Suite 103
Bohemia, NY
Ms. Thomasina Michalik, CFP®
(516)420-8792
120 Hampshire Dr
Farmingdale, NY
Mr. Joseph Brida, CFP®
(631)391-2915
10 Audubon Gate
Miller Place, NY
David Frisch
Frisch Financial Group, Inc.

(631) 271-7900
290 Broad Hollow Road, Suite 130E
Melville, NY
Cary Carbonaro
Stonegate Wealth Management, LLC

646-388-1460
7 Platt Place
Huntington, NY
Philip Capell
Piermont Wealth Management Inc.

(516) 496-7800
135 Crossways Park Drive, Suite 102
Woodbury, NY
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2 . What is a Money Market Account?

A money market account is much like a savings account that is offered by both banks and credit unions, but it has a few differences from a savings account. This type of account pays a higher interest rate than most savings accounts and may also require a higher minimum balance, anywhere from $1,000 - $2,500; it also only allows 3 to 6 withdrawals per month. For those who do not have the $1,000 to invest, there are certain banks that only require $1.00 for a money market. The time period of a money market account is normally 13 months. There is also one other difference that many money markets allow, that is the availability to write a check, though the amount of checks are usually only 3 per month. Money markets are found on the global financial market, providing liquid funding for the global financial system on a short-term basis. Unlike the capital market that provides long-term funding that is supplied by equity and bonds, money market trades are short-term financial instruments often called "paper." Consisting of financial institutions such as banks and credit unions, there are also other companies that offer money markets: financial companies, large corporations with strong credit ratings, in the United States there are trading companies, Retail and Institutional Money Market Funds, Cash management programs, and Arbitrage ABCP conduits. In London, New York, and Tokyo, there are places that will trade between banks called "money centers." Money market accounts should not be confused with money market mutual funds, and these money market accounts will have a higher yield on moneys deposited than a passbook savings account. Money market accounts can also refer to a bank money market deposit account (MMDA), a brokerage sweep for free credit balance, or a money market mutual fund.

3 . The History of Money Markets

In the early 1970s, the money market mutual fund was introduced into the American financial markets. A year later the first money market fund was established by Bruce R. Bent, the President of the Reserve Fund, Inc. The Reserve Fund sold shares to investors in 1972; even though there were only assets of $300,000, it rose to $390 million by 1975, and in early 1981, the money market had grown to $80 billion. The reason for the rapid growth was due to the availability for small investors. Often, the reason for this was because most small businesses were seasonal, and if they made an excess of $100,000, they would have to invest in T-bills or a checking account, causing the business to incur a cost of 7% on their opportunities. T-bills cost a $10,000 investment and CDs cost $100,000; however, if a business only had $95,000, it would cost the business $7,000. The money market accounts created an opening for business owners to invest a smaller amount of money with higher yields in return. Thus, the money market accounts grew into the secure successful accounts they are today. Since small business investors could pool their money together to invest more into the money markets, this allowed higher yield, diversification, check-writing privileges, and a full-time, professional portfolio management. However, the United States was not the first money market that was set up; in 1968, John Oswin Schroy set up the fund called Conta Garantia, which was set up for small investors and it allowed low denomination investments.

4 . What exactly is a Money Market?

A money market is basically a savings account that will draw interest because you are limited to a certain amount of withdrawals, and it will pay you interest that is compounded daily and paid on a monthly basis. In basic terms, this money is earned on a daily basis and then put into your account once a month. You can deposit as much as you would like during the time you have your money market account open; the only thing limited is your amount of withdrawals. What happens to your money while in the money market is also something you should know about; the financial institution will lend it to other customers, and that loan is repaid at a higher interest rate, thus you are paid though your money market. A money market is that of repurchasing agreements, commercial paper, and similar instruments of funding; the other instruments are very often benchmarked to LIBOR. LIBOR is the London Interbank Offered Rate; this is the interest rate that is offered by banks to lend unsecured funds to other banks and is the daily reference rate based on these interest rates. These unsecured funds are offered to other banks that are a wholesale money marker, also known as interbank markets throughout London. This rate is slightly higher than the London Interbank Bid Rate (LIBID).
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