There are a wide range of accounts where you can place your money, and knowing what’s ideal for you can be pretty difficult. There are varieties of saving accounts available, and you need to be able to make the perfect decision on which suits your needs best and which is right for your finances.
To do this, you need to think about the interest rates that comes with such an account. If you’re on a lookout for an account that might offer you more than the typical savings account, it might be time to consider the money market account.
Breaking Down Money Market Accounts
It’s essentially another sort of savings account; the distinction lies in the interest rate that comes with this account. It stands out amongst customary savings accounts because it’s like a mix of a savings account’s top qualities and a checking version. This account type yields more interest, and you can write checks from it, which is not possible with your customary savings account. You do need to have a higher amount saved than the lowest amount associated with a regular savings account.
This account is favored today because it allows your money to multiply, unlike a savings account with a low-interest percentage. Yet, your funds are entirely covered with insurance in case of an unexpected failure for the bank. This type of account is not supposed to hold funds for spending every day; funds cannot be accessed. There is a limit on the number of transactions you can carry out every month on this account. As stated earlier, the requirements concerning balance are higher than those of the regular savings account, so it is best to carefully consider the options available to you before making a decision.
Merits of Owning A Money Market Account
There is a right side to every account type, and there are excellent sides to owning a money market account. Owning a money market account might be the strategy you need to make your savings grow exponentially, but there are other excellent parts to this account. If you’re wondering what the benefits of this type of account is, check it out below.
Your Funds Are Covered
Investments sound tremendous and may yield money faster, but what if your investment falls through? This is something to think about when investing in bonds or other assets; can you truly handle the risk? If you’re looking for an account with far lower stakes, you might be in luck with this account. Funds saved up in an MMA are secure, and you can save knowing that no matter what happens to the bank, you’re getting your money back.
A Money Market Is A Better Version of A Savings Account
There are merits attached to a savings account that makes people go for it such as the interest rates and debit card features; you get all this with a money market account and more. With this account type, you also get to enjoy the advantages of a checking account as you’re entitled to a checkbook if you wish, and you may find there are times when a checkbook is a life-saver.
Higher Rate of Interest
The low interest associated with a regular savings account is discouraging these days; this is why a money market account might be a better option for you. The rates for these accounts are significantly higher than that of the customary savings account. Although it might not seem like much at first when it begins to add up, you’ll see reasons to keep this account. Besides, interest rates are only going to get higher, so it could be a kind of investment for you without any of the risks that come with other assets.
Another plus to this type of account is how easily you can liquidate it; this would come in useful when you need access to funds for an emergency. You can even open An MMA for splurging and let it earn interest for a while, bearing in mind that you can get your money at any time you want it. You will begin to see the merits of this account when you need to pay for an unplanned vacation or repair.
However you should know that there are limits placed on the number of transactions that can be carried out on the account every month. Find out the limitations that would come with your account and use it wisely to avoid paying a fee later.
Is This Account Ideal For Your Needs?
It’s all about how quickly you can gain access to your funds and how much interest you can get; this sets this account apart from every other type of account. If you relate to any of the factors listed below, this account might be ideal for you.
You don’t want to lock up your account in another kind of savings account like a deposit certificate.
- You don’t make many transactions in a month.
- Your checking account has a high balance.
A money market account is not what you need if you like to make many transactions in a month; the fees for extra transactions beyond the transaction limit might not be worth it. However, if you want to save much money for a specific saving goal, this account is right for you as the limit in transactions might even help you check your spending every month.
Take out time to think about it; compare the benefits of the account with your goals, and see if they align. Does this account type offer you what you need? If it is in line with your financial plan, then you should go for it.
Do Your Research
If this account is right for you, you should carry out some research before opening one. Please make sure you look for a bank with a great interest rate on money market accounts before opening an account with them. If you’re going to be storing up your money, you might as well make the most of it.