Investment Banking Tutorials
- Investment Banking Free Course
- Investment Banking Basics
- What is Investment Banking? (Overview of what do they actually do!)
- Investment Banking Functions
- Investment Banking vs Commercial Banking
- Equity Research in an Investment Bank
- What is Asset Management Company AMC
- Sales and Trading in Investment Banking
- Private Placement, IPO and FPO in Investment Banking
- Investment Banking – Underwriters and Market Makers
- Investment Banking – Mergers and Acquisitions
- Investment Banking – Restructuring and Reorganisation
- Investment Banking Roles and Responsibilities
- Market Makers
- Propreitary Trading
- Deal Origination (Sourcing)
- Initial Public Offering (IPO)
- Price-Weighted Index
- Publicly Traded Companies
- Top 4 Must Know Investment Banking Charts (Free Download Template included)
- Pitch Book | Guide to Investment Banking Pitch Book (Examples)
- What is LBO?
- Leverage buyout Lbo Analysis
- LBO Financing
- Capital Budgeting
- Capital Budgeting Methods
- Capital Budgeting Examples
- Capital Budgeting Process
- Trading Floor
- Limit Order
- Block Trade
- Gray List
- Market Order vs Limit Order
- Bid vs Ask
- Bid vs Offer Price
- Industry vs Sector
- Merchant Bank
- Money Market Account
- Best Investment Banking Books
- Nasdaq vs Dow Jones
- Nasdaq vs Nyse
- Differences Between NSE and BSE
- SWOT Analysis
- SWOT Analysis Examples
- PEST Analysis Example
- Investment Banking Careers
- Investment Banking Interview Questions (with Answers)
- How to get into Investment Banking?
- Investment Banking Analyst
- Investment Banking Job Description
- Investment Banking Division (IBD)
- Investment Banking Associate Salary
- Analyst vs Associate
- Investment Banking Job For Graduates (Engineers) | Top 8 Tips
- How to get an Investment Banking Internship?
- Top 10 Finance Certifications Programs
- Investment Banking Lifestyle
- Investment Banking Exit Opportunities
- Investment Banking Case Studies
- Top 10 Best Finance courses (with Online Certification)
- Investor Relation Job Description
- Financial Analyst Job Description
- Investment Banking vs Equity Research
- Investment Banking vs Asset Management
- Commercial Banking vs Merchant Banking
- Investment Banking vs Corporate Banking
- Portfolio Management vs Investment Banking
- Investment Banking vs Hedge Fund Manager
- Investment Banking vs Investment Management
- Investment Banking vs Private Equity
- Careers in Trading
- Investment Banking Firms
- Top Bulge Bracket Investment Banks
- Top Middle Market Investment Banks
- Top Boutique Investment Banks
- Investment Banking in Dubai
- Investment Banking In Nigeria
- Investment Banking in Abu Dhabi
- Investment Banking in Hong Kong
- Investment Banking in Russia
- Investment Banking in Brazil
- Investment Banking in China
- Investment Banking in Australia
- Investment Banking in Saudi Arabia
- Investment Banking in Singapore
- Investment Banking in London (UK)
- Investment Banking in India
- Investment Banking in Ireland
- Investment Banking in South Africa
- Investment Banking in Canada
- Investment Banking in Germany
- Investment Banking in France
- Investment Banking in Malaysia
- Investment Banking in Philippines
- Investment Banking in Boston
- Investment Banking in San Francisco
- Investment Banking in Chicago
- Investment Banking in Atlanta
- Investment Banking in Toronto
- Top Banks
- Top Banks in Australia
- Top 10 Banks in the United States of America
- Top Banks In Austria
- Top Banks In Bahrain
- Top Banks In Belgium
- Top Banks In Bermuda
- Top Banks In British Virgin Islands
- Top Banks In Brunei
- Top Banks In Canada
- Top Banks In Cayman Islands
- Top Banks In Denmark
- Top Banks In Finland
- Top Banks In France
- Top Banks In Germany
- Top Banks In Greenland
- Top Banks In Guernsey
- Top Banks In Ireland
- Top Banks In Isle of Man
- Top Banks In Japan
- Top Banks In Kuwait
- Top Banks In Liechtenstein
- Top Banks In Luxembourg
- Top Banks In Macau
- Top Banks In Norway
- Top Banks In Oman
- Top Banks in Pakistan
- Top Banks in Philippines
- Top Banks In Puerto Rico
- Top Banks In Qatar
- Top Banks In Saudi Arabia
- Banks in South Africa
- Top Banks In Singapore
- Top Banks In South Korea
- Top Banks In Sweden
- Top Banks In Switzerland
- Top Banks in UAE
- Top 10 Banks in United Arab Emirates
- Top Banks in United Kingdom
- Top Banks in USA
- Banks in Nigeria
- Top 10 Banks in Netherlands
- Top 10 Banks in Malta
- Mergers and Acquisitions
- What is Mergers and Acquisitions?
- Mergers vs Acquisitions
- Acquisitions Examples
- Horizontal Merger
- Vertical Merger
- Synergy in M&A
- Successful Mergers and Acquisitions
- Financing Acquisitions
- Acquisition Premium (Takeover)
- Statutory Merger
- Joint Venture
- Advantages of Joint Venture
- Types of Joint Venture
- White Knight
- Hostile Takeover
- Golden Parachute
- Poison Pills
- Killer Bees Defense Strategy
- Show Stopper in M&A
- What is Amalgamation?
- Spin off vs Split Off
- Forward Integration
- Backward Integration
- Horizontal vs Vertical Integration
- What is Divesting / Divestiture?
- Bootstrap Effect
- PAC MAN Defense
- Flip-In Poison Pill
- Flip-Over Poison Pill
- Scorched Earth Defense Policy
- Tender Offer
- Friendly Takeover
- Amalgamation vs Merger
- Lobster Trap Defense
- Asset Purchase vs Stock Purchase
- Joint Venture vs Strategic Alliance
- Greenshoe Option
- Dawn Raid Takeovers
- Crown Jewels Defense
- Best Mergers and Acquisitions Books
- What is Asset Restructuring?
- Cryptocurrency Basics
- Bitcoins | Advantages and Disadvantages of Bitcoin Technology
- Cryptocurrency | Top 5 Cryptocurrency You Must Know!
- Bitcoin vs Ethereum | Top 6 Differences You Must Know (Infographics)
- Ethereum vs Litecoin
- Ripple vs Stellar
- Bitcoin vs Cryptocurrency
- Bitcoin vs Blockchain
- Ripple vs Litecoin
- Bitcoin vs Litecoin
- Ethereum vs Ethereum Classic
What is the Money Market Account?
Money Market Account is a saving account with privileges like this account is insured and comes with higher interest rates, however, it is also limited with respect to check writing capabilities and higher bank charges. In the financial market, in order to attract the customers, banks and NBFCs keep on coming with new products providing attractive features of money market and advantages of money market account to the customers.
Features of Money Market
Technically, Following are features of money market:
- Minimum Balance Requirement: There will need to maintain a specified amount as an average balance over the period of time.
- Higher Interest Rate: Interest rates provided in such account will be higher than the normal provided under savings account or such equivalent financial instrument.
- Insured Accounts: Generally, It balances will be secured by Federal Deposit Insurance Company (FDIC) and the National Credit Union Administration (NCUA).
- High Bank Charges: There are high charges for non-maintenance of account or doing transactions more than the specified limit.
- Limited Check Writing: One can do a very limited number of check writing transaction as compared to Saving account.
Example of Money Market Account
In the market, various kinds of products in financial services are available. it is one of them. Mr. ABC wanted to invest the money for a shorter duration but that proposal should be secured one, that can fetch him higher return.
So he approached, Bank PQR to obtain the understanding of the account. So the bank explained in detail that this account will provide a better return with better security. Also, the bank explained about features and perks available with the account.
Mr.ABC placed in an account to invest them in it. Funds with the short term requirement, the bank will invest in the securities and gilt. The duration of such securities will be extremely shorter with a far better return than normal money market. On maturity, such account would receive the balance from the investment along with a better amount as a return. Also,
Following are advantages of Money Market Account:
- Better Interest: It gives a better rate of interest compared to savings.
- Better Liquidity: In deposits, your funds will be blocked for the specified period of time, however in Money Market account, one can withdraw based on the requirement.
- Highly Safe: Money market balances are insured by national institutions, and all the balances are in safe hand.
- Daily Compounding: The best part of the money market account is daily compounding and hence one can earn accumulating daily return which will give better results compared to other accounts types.
Following are disadvantages of Money Market Account:
- Minimum Balance: Based on the financial institution’s minimum balance requirement, the account holder will have to park minimum funds in the accounts.
- Limited Check Transaction: Biggest drawback in such account is a limited number of transactions, as a result, a user may face a sometimes liquidity crisis.
- Less Regulated: Money market is less regulated. So, institutions based on their requirement will keep charges, minimum balance requirement, etc, which will affect the financial transactions of the user.
- Higher Charges: It requires a minimum balance requirement or a limited number of transactions. If one is exceeding the prescribed limit, then higher charges will be levied as compared to the normal savings account.
Uses of Money Market Account
- Emergency Usage / Usage of Last Resort: When an investor does not require funds in routine transactions and want to withdraw in an extreme situation, such accounts are the best place to invest.
- Short Term Investment Horizon: For investors, who want a liquid investment with a higher return, this can give them good benefits.
Difference Between Money Market Account Vs Money Market Fund
Generally, one can consider it and Money Market fund as a synonym, but in reality, it is not like that. Both are completely different product operating in a different environment and invested with different intent.
Let’s understand the difference between Money Market Account and Money Market Fund:
|Basis||Money Market Account||Money Market Fund|
|Industry||It operates in the Banking Industry||Money Market Fund operates in Mutual Fund/AMC industry|
|Security||It’s Balances are fully secured||There is no security for the balances in the money market funds.|
|Return||It has a static rate of interest as a return||Money Market Funds return differs based on the market situation. So, there is no fixed rate of return.|
|Number of Transactions||It has a minimum of 6 transactions are allowed||Money Market Funds allows unlimited transactions at user discretion|
|Timing Restrictions||It allows transactions only during banking hours.||Money market fund allows transactions throughout the day without any limits.|
Difference Between Money Market Account and Savings Account
For a layman, Money market account and Savings account are same only. However, based on the nature and procedure of working, there exist a thin line of difference between them.
Let us understand the difference between both the accounts:
|Basis||Money Market Account||Saving Account|
|Interest Rate||It provides preferential rate as compared to a savings account||A savings account provides a very low-interest-rate as compared to a Money Market Account|
|Number of Transaction||Generally, only 6 transactions are allowed under it||Saving Account provides unlimited transactions for banking|
|Balance||Requires minimum balance required to be maintained on an average basis over a specified time period||Such requirement is not there in Savings Bank Account|
|Number of Checks||Around 6 check writing transactions are allowed in it||In Savings account, there are no restrictions of check writing transactions|
|Withdrawal Limitations||There is no flexibility in withdrawal in the money market account||In Savings account, flexibility is there in cash withdrawal|
|Insurance||They are fully secured by national institutions.||There is no security for the balance in a savings bank account.|
It is a completely different set of account as compared to a savings account or such other money market product like the certificate of deposits etc. However, before investing anywhere, the user must analyze the returns based on past trends and should also take professional opinion about the investment option.
This has been a guide to Money Market Account. Here we discuss Money Market definition, features, uses, advantages, and disadvantages along with examples. You can learn more about financing from the following articles –