What is typically true about interest rates in a money market account?

In a money market account, interest rates are generally lower compared to other investment types like stocks, bonds, or certificates of deposit (CDs). Money market accounts are designed for liquidity and safety, often featuring varying rates that reflect the current economic environment, central bank policies, and other factors. While they do offer more interest than a standard savings account, the return is typically modest compared to higher-risk investments.

Investment types such as stocks can provide greater potential returns but come with increased risk and volatility, meaning they are not guaranteed. Therefore, understanding the nature of money market accounts as lower risk and lower yield is essential in the context of overall financial planning.