How to find the best money market rates

If you’re the kind of investor who is looking for a more conservative, less risky investment without compromising the chance to make money, you’ll need to find the best money market rates possible. If you aren’t experienced, it can be a challenge to sift through the seemingly endless array of choices to find a money market fund that will work for you, both to keep your investment protected and to still offer a decent (if not better) return. The great news is that there are many resources out there that can make the process of finding the best money market rates much easier.

The bank

The bank is probably your best bet for a first stop. Most banks have accounts that offer good rates that require only small deposits. Be careful, though: These accounts typically have rules regarding how often you can withdraw money from them without having to pay a penalty. Always read the fine print before you sign on the dotted line, to avoid surprises later.

It’s important to note that money market accounts are not always as well touted by banks as are other types of accounts, such as standard chequing or savings accounts. You may have to specifically ask about them. And don’t simply go with the first money market account you find at the first bank. Check other banks to be sure you are getting the best rate you can.

The Internet

The Internet is the next place to look for money market accounts. Not only can you find the accounts themselves through this method, it’s also a great place to find out more information about how these markets work. Beware, however! The Internet is a treasure trove of information, some good and some suspect. Be sure your information is coming from a reliable source before you base any financial decisions on what you find. Note that some funds are insured, meaning that if the fund fails your investment would protected. Mutual funds and income funds, for example, are not typically insured, so if the fund fails your investment is in jeopardy.

Be wary of money market rates that seem too good to be true. If they seem too good to be true, they probably are. In most cases, risk is relative to reward. Always read the fund’s prospectus carefully to understand exactly how the fund makes its money and the level of risk the fund manager is taking on. In some cases, the government backs up these funds, providing a safety net for your investment, but this is not always the case. Be sure you also understand the fee and cost structure associated with the fund. It’s possible that these costs will come out of that good rate, making it less impressive than it seems at first blush.

If you are looking to find the best money market rates available, one that offers the opportunity for relatively low-risk investment with a decent return, it’s important to do your research to find the one that best suits your needs. Although it may take extra time, you’ll never regret doing the research to find the right rate.