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  • Money Market Savings Account: How They Can Work for You

    Money Market Savings Account: How They Can Work for You

    If you’re interested in getting your money to work for you, then you should think about getting a money market savings account. Maybe you’ve heard about these types of accounts but you’re not sure if it’s right for you.

    Today we’re looking a bit deeper into MMAs and we’ll tell you everything you need to know about these financial opportunities.

    Money Market Savings Account

    The Difference

    A savings account, on average, doesn’t have particularly high-interest rates. Compared to a money market account, a savings account is much lower in terms of contributions and minimum balances. Generally speaking, anyone can open a savings account and can afford the minimum balance and deposits.

    On the flip side, a money market account is, on average, going to offer much higher interest rates. That’s because an MMA is more like a combination of a checking and savings account. These accounts tend to have much higher minimum balances. Generally speaking, MMAs are for people with higher income levels than average.

    Why Open an MMA

    There are some upsides to opening a money market account. Notably, these accounts are insured and protected, and you can feel assured when you deposit upwards of thousands of dollars into them. People often prefer to deposit large sums in MMAs because of the higher interest rates they tend to have.

    If your bank or credit union offers a high-interest rate on an MMA, consider moving your savings into such an account.

    Another reason people like MMAs is because they offer access to your funds in a pinch. You can write up to six checks per months from an MMA, and you can use a debit card for those funds up to six times per month. That makes them ideal for covering larger transactions that occur infrequently.

    What to Look For

    Generally speaking, when you’re looking for a good MMA, you want to find the one with the best interest rates. If the rates in an MMA are comparable to your savings account, you can safely ignore it. Likewise, if the interest rate is much higher, invest your money there.

    On the same track, try to find an MMA that doesn’t have monthly fees. There are plenty of MMAs out there that don’t charge monthly fees and offer great interest rates. As such, there’s no reason for you to pay more just to have your money grow!

  • Money Market Account Instead of a Savings Account?

    Money Market Account Instead of a Savings Account?

    It might sound odd, but you might consider opening a money market account instead of a savings account. Most people have a checking and a savings account. The checking account is used for your normal transactions, while your savings account gradually gains interest on your money and helps you save up. What is a money market account, then?

    What is a Money Market Account?

    A money market account is sort of like a checking and savings account rolled into one. You can make withdrawal and deposits, write checks and transfer money electronically. Additionally, it will accrue interest, much like a savings account. You are also, usually, given an ATM card to use with a money market account. That makes them pretty convenient alternatives to traditional checking and savings accounts!

    That said, there are a few limitations to the account type. Notably, you usually have to have a higher balance in a money market account than a checking or savings account. Additionally, you also can’t write a very large number of checks from it in a given period.

    The Upsides

    While those might sound like notable downsides, they’re largely mitigated by the upsides. For one thing, most money market accounts offer better interest rates than savings accounts. There are a few reasons for this, and they’re related to the aforementioned downsides. Firstly, since you have to float a higher balance in a money market account, they offer more money for the bank to invest with.

    Secondly, the smaller number of checks you can write through a money market account means that there are lower fees for the bank to pay. Thirdly, the types of things money market accounts’ funds can be invested in are generally higher in return than the things savings accounts can invest in. Essentially, the regulations on this account type are different, meaning it can be invested more aggressively.

    Should You Go This Route?

    That depends on your personal funds. If you have a larger amount of money to save, a money market might be the right account type for you. It’s also convenient to have everything saved up in the same account. That convenience is furthered by the ATM card most of these accounts offer, giving you quicker access to your money.

    If you tend to float lower balances however, such as if you are younger with less savings, these accounts might not be right for you. Of course, everyone’s financial situation is different. However, under the right conditions, a money market account could be a better option for you than traditional checking and savings!