Taking on the steps towards a savings journey is a great initiative. However, the biggest question always remains: where to keep your saved money. While there are many traditional options in the market, in your search to understand where you can keep your saved money, you must have come across an alternative option, too. Wondering what we are talking about?
Well, Money Market Accounts, of course! If you are someone who heard or read about this and wanted to know more, then you have landed on the right page. Hop on below to learn more about these particular savings accounts you can use.
What is a Money Market Account?
A money market account is similar to a deposit account, which traditional banks, credit unions, and online banks can offer. They are also referred to as money market deposit accounts or money market savings accounts.
Money market accounts are also interest-bearing. This means that the money which is deposited in the account can grow over time with interest. This is one aspect that makes it similar to a savings account, but there is one factor that sets it apart as well. What is it?
Well, unlike a savings account, the money market account allows its users to write checks or get an ATM card to make withdrawals and purchases. With all this clear, why don't we hop on below to learn about the benefits this particular type of account can provide you?
The Leading Benefits of Money Market Accounts
Here are the top benefits of a money market account you can avail:
Having a money market account comes with a lot of flexibility. To start, depositing or transferring money between the linked MMAs is highly convenient if you have multiple accounts from the same bank. Moreover, users also get the ease of paying bills, making payments, or withdrawing money through the ATM cards they receive. While all this is great, these accounts can also be used to fund multiple saving goals for both short and long terms.
The biggest concern for anyone when opening up a savings account or a combination (savings + withdrawal) account like a Money Market Account is the safety of their money. This is because we all know that, at times, vast amounts of cash lying in accounts are disposed to risk. Well, with an MMA, it is not something you need to worry about.
In fact, Money Market Accounts offer immense safety and security if your funds are held at an FDIC-insured bank or credit union. These accounts are incredibly low-risk ways to hold onto funds, which you don't need to use right away.
Compared to other types of deposit accounts, Money Market Accounts provide relatively competitive rates. Therefore, if your top priority is to earn the best possible rates on your savings while keeping your money easily accessible, a Money Market Account is the ideal choice for you.
While it allows you security to save your money, the Money Market Account also lets users withdraw money as per their liking. Being able to withdraw money is essential, and the Money Market Account lets users access their money at any time, unlike a certificate of deposit account. Users can withdraw money through ATMs, electronic transfers, and even check!
How to Choose the Right Money Market Account?
Now that you know all the essential benefits of a Money Market Account, we are sure you'd be intrigued to open one. However, given that there are multiple MMAs in the market, the question is how to choose the proper money market account. If this is the same query that is looming in your head, we have this aspect covered for you as well:
Understand the Interest Rate
Different banks offer users to open a Money Market Account, and similar to the diversification in the banks; the interest rates differ as well. Hence, do your research well and learn about the different types of interest rates of each bank. When you find one that suits you best, move on to look into the factors of that Money Market Account next.
Learn About the Minimum Deposit Requirement
Banks require you to deposit an amount in order to open an MMA account. When searching on different banks, also look into the deposit requirements of each bank. Then, choose the bank whose deposit requirement suits your pocket.
What is the Minimum Balance Requirement
Each MMA requires users to have a minimum balance requirement in their accounts. If these balance requirements are not met, then a particular amount of fee is charged to the user. At times, the interest rate may also drop for users if the requirements aren't met. Hence, check the minimum balance requirement to ensure that you can meet it.
Number of Withdrawals Per Month
With an MMA account, there are a specific number of withdrawals that you can make each month. Hence, it is ideal to understand what is the number of withdrawals one can make through a specific MMA account and then choose one accordingly.
What is the Monthly Fees to Maintain the Account
Some banks require a monthly fee to maintain the MMA account. Hence, it is ideal to look into this aspect as well.
The primary reason why you read thoroughly through up until here was probably because you wanted to know all about Money Market Accounts and the benefits they can provide. If that is the case, then we hope this article was helpful enough for you to understand this, along with enlightening you on ways through which you can choose an MMA account.