If you’re thinking about opening a money market account but remain cautious, there are some benefits to these type of accounts that can lead you to better financial health.
1. Bank Accounts That Encourage You to Save
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Money market accounts (MMA) do help people save for the future and gain a more attractive interest rate than a regular savings account. Let’s say you’re saving for the down payment on that new home you’ve always wanted. Because most money market accounts set a limit on withdrawals, they become a better way to ensure you continue to place money into the account and keep it there until you’ve reached your down payment goals.
Along with the better interest rate you’ll gain and Bankrate lists average rates, this type of savings can be short or long-term. The trick is to open one as soon as you can and make a commitment to leaving it untouched until you need the money for set goals.
2. There Are More Than One Type of MMAs
Most don’t realize there are various types of money market accounts and each comes with a different interest rate, although all are attractive.
Many banks and credit unions offer standard MMAs that don’t require any initial deposit minimum or only require an initial investment of $1,000 to $2,000. Then there are what is known in the banking industry as MMA $10K accounts, where the required deposit is ten thousand. Finally, there are Jumbo MMAs where deposits of $100K are accepted and these accounts offer the highest interest rates of all.
You may not think you’d ever need a $10K or $100K MMA but what if you came into money and weren’t quite sure what to do with it? A money market account ensures your money is FDIC insured along with an interest rate you won’t find in a regular savings account.
Once deposited and safe, a MMA affords you the opportunity to make wise choices on long-term investments or to make other financial decisions like setting up trust or retirement accounts.
3. You Can Set Up Direct Deposit Into MMAs
Many people already have a money market account but have their entire paycheck deposited into their checking or savings account—or split between the two. You can also set up direct deposits straight to your money market account—just ask your payroll department for the correct forms to get started.
Because the goals of a money market account are to save and gain a higher interest rate, wouldn’t it be easier to save if you didn’t have to manually deposit the money into your MMA?
4. Hassle-Free Advice on MMAs Is Easily Found
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The World Wide Web makes it easy to research money market account offerings from various financial institutions and it’s important you do so to find the best interest rates and terms. Another way to seek out information is to turn to experts like Fisher Investments MarketMinder‘s Twitter page where common questions about MMAs are offered on a regular basis. This is also a great place to follow hot financial trends and gain insight into other financial endeavors that may benefit you and your family.
At Bankrate you can browse the various rules and regulations of MMAs for numerous banks to aid you in choosing the right financial institution. Keep in mind that your local bank may be your first choice but research is necessary to determine the best choice.
Money market accounts do help those who find it hard to save for the future and you can quickly withdrawal the money as easily as you put it in along with gaining a higher interest rate. If your goals are to save or you are unsure of what to do with a large amount of money, these accounts aren’t only attractive, they are also smart.