Finding Your Perfect Money Market Account: 9 Factors to Consider

If you've been looking at money market accounts and wondering how to choose one, the answer is that you have to divide your attention between two types of factors: the characteristics of the bank, and the features of specific money market accounts.

Finding the Right Money Market Account

The following is a list of nine factors to consider when shopping for money market accounts--four that relate to the banking institution, and five that have to do with the particular money market account products available.

Four Bank Characteristics

1. Bank stability and reputation. You can investigate a bank's stability and reputation through both informal and formal sources. It never hurts to ask around and find out whether your friends have had good or bad experiences with a specific bank. You can also do an Internet search for articles and comments about particular banks. Finally, if you really want to dig into a bank's financial status, you can look up a Uniform Bank Performance Report via the Federal Financial Institutions Examination Council.
2. Location. If you like to do banking in person, having a convenient location will be important. Visit the local branch a couple times--a bustling branch is a good sign, because it is less likely to be targeted for closure.
3. Web site. For more and more people, a bank's Web site is the only branch office they need. Even if you like to visit a bank in person, a Web site should still be a valuable source of information. Check to see if the bank's Web site is thorough, easy to navigate, kept up-to-date, and secure for any transactions you choose to do online.
4. Responsiveness. Contact the bank a couple times with questions. Check not only to see if you get a prompt response, but also if the people you speak with seem knowledgeable and engaged.

Five Money Market Account Characteristics

1. Money market rates. No surprise here--finding the best money market rates is a top reasons why people shop for a new account. MoneyRates.com makes it easy to compare different money market rates. Be sure to focus on the underlying rate, not just an introductory or "teaser" rate.
2. Balance requirements. Another key factor to consider is a minimum balance requirement. Some banks offer larger depositors higher interest rates, or other perks like free checking. Concentrate your search on accounts with balance requirements your intended deposit will meet.
3. Transfer restrictions. Money market accounts will often have some restrictions on how often you can access your account. Be sure you check out the specific restrictions on any account you are interested in, and make sure those restrictions are consistent with your intended use of the account.
4. Transfer fees. Some banks may charge a fee for transfers out of the account, and different fees may apply to in-house transfers (e.g., to a checking account at the same bank) and external transfers. Transfer fees should be a factor in your decision, though less so if you plan to rarely access the money in your account.
5. Introductory offers. Introductory offers like teaser rates or cash bonuses for opening an account are all well and good as tiebreakers if you are torn between two choices. However, these should be minor considerations compared to other characteristics that will affect your banking experience on an ongoing basis.

In today's banking environment especially, all of the above factors are subject to change at any time. These nine factors are a useful checklist not only when shopping for a new money market account but also when periodically monitoring the account you choose to make sure it stays competitive.