How does paypal's Money Market Reserve Fund work?

i added it to my account I am not framiliar with any thing financial... how does this work and what if I need to make a with drawl... whill i be penalized?

Over a period of time, you'll earn a little over 5% interest on your account balance. Due to the fact that it is directly linked to a money market fund, sometimes it will be less, sometimes more.

You won't be penilized for withdrawls, but if you make a profit at the end of the year, you will need to declare the interest income on your taxes. I'm not sure if Paypal mails out 1099 for this or not, but more than like either they will or the company that manages the money market.

Overall, this is a good idea. Your not making interest off it any other way so I would recommend it to anyone with a paypal account.

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