Chartered Wealth Manager 2025 – 400 Free Practice Questions to Pass the Exam

Money market accounts are designed to provide a balance between earning interest and maintaining liquidity, making them suitable for short-term investments. One common feature of these accounts is that they typically offer the opportunity to earn a higher interest rate than traditional savings accounts, though not as high as some long-term investment options.

The feature of short-term investment options aligns with the primary purpose of money market accounts, which is to hold funds that may be needed in the near future while also offering a competitive interest rate. Investors choose money market accounts when they want to preserve capital while still earning some interest, especially for funds they may need to access within a short timeframe.

In contrast, while money market accounts do offer a reasonable level of access to funds, they usually do not allow for unlimited access. Additionally, their liquidity can sometimes be comparable to savings accounts rather than lower, depending on the specific terms set by the financial institution. Therefore, short-term investment options stand out as a defining characteristic of money market accounts.