Why You Should Open an Online High-yield Money Market Account

If you haven't opened an online money market account you really should! INGdirect.com was one of the first pioneers in this market and are still are major player. Generally these accounts offer much higher interest rates than those of traditional banks. This is because they don't have the operational overhead of brick and mortar branches and generally they don't require as many employees to run. They then pass on these savings to you the customer.

High-yield money market accounts aren't new and have been around for years. Online money market accounts have been around for about a decade or so. Recently however, many traditional banks have entered the market with there own Online money market accounts offering great rates. ING direct does have one unique feature in that they also offer a checking account offering 3% APY for accounts with less than $50,000.00! This is unheard of in the world of traditional interest bearing checking accounts.

Now you may be wondering if the few extra dollars you earn is really worth all of the hassle of transferring money into an online account where you can't even walk into a branch and talk to someone about it. Here's some numbers for you: If you were to put $5,000.00 into your typical savings account which offers an APY of 1% and you leave it in there for 5 years you'll earn a total of $256.25 in interest. Now if you put that same $5,000 into an online money market account earning a competitive 5% you'll earn 1416.79 in interest! How's that for a bit of work?

Keep in mind these accounts are FDIC insured just like your savings account at your bank. All you have to do is give the online bank your checking or savings account information and they'll transfer the funds into your account for you and your done. You can of course withdraw your money at anytime.