How does a high-yield money market work?
by 
The Curious Bag
ANSWERS: 1
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A high-yield money market account is an investment instrument that pays a higher interest rate than regular savings or checking accounts. In addition, depositors are required to keep a higher balance relative to other deposit accounts.
Purpose
A high-yield money market account attempts to make money grow by investing the deposits in short-term debt investments used to finance business growth.
Interest Rates
Interest rates are often determined by the issuing institution and are normally higher than ordinary savings and checking accounts.
Withdrawals
Although funds in a money market account are available to the account holder, withdrawals are typically limited to only a few per month.
Balance Requirements
Because money market accounts offer higher interest rates, the issuing institution imposes minimum balance requirements.
Deposit Insurance
Current law protects deposits in a money market account up to $250,000.
Source:
Financial Markets and Institutions, Abridged 8th Edition
Federal Deposit Insurance Corporation
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