Money market accounts can provide a safe, productive way to store your money
A money market account is an account that typically comes with a higher interest rate than other savings accounts. If investing in stocks and bonds is not something that appeals to you, but you would still like to make your money grow safely, opening a money market account could be the right move. There are still some factors that you should consider before committing to your decision.
Higher interest
The main appeal of money market accounts is that they typically offer higher interest rates than savings accounts, though this is not always true on a case-by-case basis. Investing deposits for money market accounts are held in government securities, commercial paper and certificates of deposit, returning higher yields than you would normally get from a savings account.
MMAs also provided the added bonus of security comparable to that of a traditional savings account. According to NerdWallet’s Margarette Burnette, these accounts are backed by the Federal Deposit Insurance Corporation and National Credit Union Administration for up to $250,000.
Minimum balance
Compared to a regular savings account, which may have a minimum balance requirement, a money market account is likely to require an even greater minimum daily balance as well as a higher minimum deposit requirement when you want to put money into the account. The minimum requirement may also be based on a tiered system. With more money in the account, you can benefit from higher interest rates. If you are under your minimum requirements, you could be hit with expensive maintenance fees. Because of this, it is best to open an MMA if you are sure that you will be able to maintain its conditions and reap the full benefits of using it for saving.
Should you open a money market account?
Money market accounts are a great alternative to the traditional savings account that provide benefits similar to that of a checking account should you need to make the occasional withdrawal. Check out our Money Market options. It’s possible they offer even more fruitful ways to store your money, or equally fruitful options that have fewer limitations.[/vc_column_text][/vc_column][/vc_row]Money market accounts can provide a safe, productive way to store your money
A money market account is an account that typically comes with a higher interest rate than other savings accounts. If investing in stocks and bonds is not something that appeals to you, but you would still like to make your money grow safely, opening a money market account could be the right move. There are still some factors that you should consider before committing to your decision.
Higher interest
The main appeal of money market accounts is that they typically offer higher interest rates than savings accounts, though this is not always true on a case-by-case basis. Investing deposits for money market accounts are held in government securities, commercial paper and certificates of deposit, returning higher yields than you would normally get from a savings account.
MMAs also provided the added bonus of security comparable to that of a traditional savings account. According to NerdWallet’s Margarette Burnette, these accounts are backed by the Federal Deposit Insurance Corporation and National Credit Union Administration for up to $250,000.
Minimum balance
Compared to a regular savings account, which may have a minimum balance requirement, a money market account is likely to require an even greater minimum daily balance as well as a higher minimum deposit requirement when you want to put money into the account. The minimum requirement may also be based on a tiered system. With more money in the account, you can benefit from higher interest rates. If you are under your minimum requirements, you could be hit with expensive maintenance fees. Because of this, it is best to open an MMA if you are sure that you will be able to maintain its conditions and reap the full benefits of using it for saving.
Should you open a money market account?
Money market accounts are a great alternative to the traditional savings account that provide benefits similar to that of a checking account should you need to make the occasional withdrawal. Check out our Money Market options. It’s possible they offer even more fruitful ways to store your money, or equally fruitful options that have fewer limitations.[/vc_column_text][/vc_column][/vc_row]