I want to start a mponey market account with my bank (Navy Federal) what is a money market account

How will it benefit me if I start one?
      Answer1:Boy, their advertising department got to you, didnt they?A money market account is a special savings account where you can deposit money, and it will earn a guaranteed interest rate for a set time period. However, you have to leave the money in the account for that time, or you forfeit the interest rate, and may pay a penalty as well for early withdrawal. Your benefit is that the money is guaranteed safe, and it will earn an interest rate higher than what a regular savings account will. Your downside is that you cant touch it without penalty for the time period specified, and you forgo the opportunity to put it somewhere else, where it may make more money for you. But thats what the bank is doing - investing it somewhere else, and hopefully making a profit for themselves.
      Answer2:NOT TRUE. - what he describes is a CD.A money market account looks like a regular savings account.There may be a requirement for a minimum deposit, but there are no time limits. It is usually held by an investment firm (of the bank) and is not covered under the FDIC. It usually pays a much higher interest rate than a regular bank savings account and varies month to month based on the prime rate. U can withdraw at any time and there is usually a min amount for a withdrawal. Checks are also issued to make withdrawals.If u have $5000 or more in a regular account think about converting some to a MM account. When ur regular account gets low, just transfer some from MM to it, or pay large bills from it.