Brokerage Vs. Bank MMAs

by James & Miel on April 11, 2009 · 0 comments

Okay, if you have money available in your brokerage account, you might be wondering which is better, a money market fund or a money market deposit account.

If this is the case, the answer is you should probably get the money market deposit account.

Money market brokerage funds currently have a very low yield, between .22 and .30 on annualized 30 day terms. On the other hand, commercial banks are offering .90 to 2.2 percent for comparable products. In addition, commercial banks have FDIC insurance. So, the combination of a higher yield and FDIC protection gives money market deposit accounts an edge. Even a slightly higher return should help you build more wealth long-term.

Best,

James

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