A money market account is like a savings account, but it comes with options that used to only be seen with checking accounts (such as checks and a debit card to use when needed). It’s for this reason that many have found this to be a great solution that allows them to save while being able to get their hands on the funds that they need in the event of an emergency without heft penalties.
Keep in mind that with a money market account that it is common to have a higher minimum balance than any other type of accounts. However, this does come with a slightly higher interest rate than banks give with their savings accounts.
How a Money Market Account Works
Essentially this a type of bank account which is a hybrid of a checking and savings account. It’s not classified as one or the other. You make your initial deposit (which is usually higher than other types of accounts) and the account is ready to use.
Depending on the bank you choose to go with, you need to keep in mind that there are usually withdrawal limits each month. While financial institutions understand that you need your funds if something arises, they want to encourage you to continue saving as much as you can. You can withdrawal via the money market debit card provided to you, writing a check on your money market account, or by going to the bank directly.
The Benefits of Having a Money Market Account
While there is quite an extensive list of benefits when it comes to having a money market account, it is best not to overwhelm you with all of them. With that said, here are the top 3 money market account advantages that you could embrace if this is the route that you want to go.
· Competitive interest rates are made available with money market accounts.
You’ll find that money market accounts can provide a better return than CDs or savings accounts which makes it great for those wanting the most out of their money. Keep in mind that it may not be tons more like it was when these types of accounts were first introduced, but it’s still leading the pack.
· Eliminate hefty withdrawal fees that are commonplace with savings accounts.
Many people avoid savings accounts because they end up getting charged fees if they take their money out. While banks may see these kinds of fees as encouragement, it’s not ideal for consumers. Say goodbye to those with a money market account as it takes the best of both worlds and blends them into a simple and efficient solution.
· Your funds are insured by the FDIC making it a safe choice for saving money.
Just like with other types of bank accounts, your money is safe as long as you choose a financial institution that’s insured by the FDIC (most are). This means that unlike other types of investment accounts, you won’t risk having to watch your hard-earned cash slip away.
Hopefully, this helped you understand the power of having a money market account. Just keep in mind that you want to explore your options just like you would with any other type of account. It’s the only way that you’re going to uncover the best offerings as there are no shortcuts you can take.
