ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Money market accounts work like other deposit accounts, such as savings accounts. As customers deposit funds in a money market account, they earn interest on those funds. Typically, interest on money market accounts is compounded daily and paid monthly.

Detailed explanation-2: -Money market accounts are pay a slightly higher interest rate than traditional savings accounts because banks invest in short-term, highly liquid low-risk assets. Many money market accounts come with minimum balance requirements.

Detailed explanation-3: -Returns from these instruments are dependent on the applicable market interest rates, and therefore the overall returns from money market funds are also dependent on interest rates. So, the lower the rate set by the Fed, the lower the rate a money market fund pays to its investors.

Detailed explanation-4: -You can earn interest: Right now, the best money market accounts pay around 3 to 4 percent annual percentage yield (APY), a significant increase from a year ago. Deposits are insured: Your money is insured up to $250, 000 per account owner with accounts at a bank or credit union.