If you are new to investing you may be wondering what a money market account really is.

Simply put a money market account is the way a bank or credit union, as well as other financial institutions, put your money to work by lending, borrowing, or even currency trading.

The methods used may include CDs (Certificates of Deposit), Forex trading (currencies), T-bills (Treasury Bills), or other short term, low rick investments.

Money market accounts have the same federal regulations as savings accounts. The money market account is different than a regular savings account in that you reap the benefit of higher interest. Credit Unions may pay better interest yields than regular banks. Some online money market accounts have lower opening balances, higher yields of interest and are competitive with banks and credit unions.

Be aware that the rates may change without notice after you open the account depending on the market, they may go up or down.

Money market accounts may have higher minimum balance requirements and have regulations on withdrawals. Most allow transfers or withdrawals of three to six each month. Three of the withdrawals may be made by checks. If you write more checks than that they will charge you a fee.

You can also ask if they provide a debit card (some of them do) which you may use for purchases and ATM withdrawals. This gives you instant access to your money. The disadvantage of writing checks and being able to withdraw your money is that you may not leave enough in your account for it to grow as well as it should.

Some banks discourage money market account holders from taking out their money by charging fees which will reduce your earnings. In some cases if you exceed the regulations, you may get your account closed.

You may read online that some money market accounts are not insured. No need to worry about your money not being insured as money market accounts taken out in FDIC insured banks have the same FDIC assurance as regular savings accounts. Accounts taken out in credit unions are insured by the National Credit Union Administration (NCUA) which is a federal agency.