Investing in the stock or bond markets carries substantial risk to go together with the growth possible, but placing your cash in a savings account reduces the growth potential nearly completely. A brokerage money market account might turn out to be the compromise you seek between security and growth. A brokerage money market account is a interest-bearing account provided by a brokerage which utilizes the funds invested in the account for holding short-term securities. Most brokerage money market accounts provide an interest rate greater than that of traditional savings account, but locating the best account is more than just finding the maximum rate.
Create a list of the competing currency accounts you are comparing on a sheet of paper, leaving space near each account to write details about the account.
Write down the normal interest rates for each account. Ignore the introductory rate, as the introductory phase isn’t long enough to make a substantial gap in the overall earnings potential of the account. The normal interest rate is that the base rate your account will make over time.
List the compounding interval for the sake. The more often interest is compounded in your invested funds, the more interest you earn in the very long run.
Write down all fees associated with the account. Frequent fees include a set up fee, administrative fees and a minimum balance fee applied when your account falls below a minimum quantity.
Utilize an internet compounding interest calculator to determine the total amount of interest earned on the amount you want to deposit with the money market account. Be sure to input compounding periods when creating the calculation. This will provide you your base interest level. Compute the amount for all competing accounts.
Subtract all potential fees from the bottom interest level for each account. Write this last amount down since the true yield on your investment over the interest period. Evaluate the actual return earned to determine the best currency exchange account by actual earned rate.