Money market account
But while your savings are harder to access, that means you’re less likely to spend the money on frivolous purchases.Ī traditional savings account is a good option for most bank and credit union customers who want to help their savings grow. In order to use money from a traditional savings account, you’ll need to make a transfer into your checking account either online or in person at a bank branch, or withdraw the money at your bank. Traditional savings accounts typically offer lower interest rates than MMAs, but you can open one more easily with a small sum of money if you’re just getting started. And while you will be able to write checks or pay with a debit card using funds from your MMA, that might make it too tempting to spend money on things you don’t need.Īn MMA is a good option if you want to save a larger sum of money and get a higher return, but still want to be able to access the funds if you need them. Money market accountsĪ money market account can offer a higher interest rate than regular savings accounts, but you’ll likely be required to make a larger initial deposit and keep a higher minimum balance than with other types of accounts. If you are trying to decide between a money market account or another type of savings account, it’s important to understand how each works so you can choose which option is best for you.
Pros and cons of a money market accountĪs with any type of bank account, MMAs have their share of benefits and drawbacks. Traditional savings accounts are not able to do this with your money, which means they accordingly come with lower interest rates. That is because they are allowed to invest your funds into certificates of deposit, government securities, and commercial paper, which makes them more lucrative to a financial institution. MMAs often have a higher interest rate than a regular savings account. That makes it easier to access your money if you find yourself in a bind and need to pay an unexpected bill. With a MMA, you can use a check or a debit card to withdraw funds from your account up to six times per month without penalty. With traditional savings accounts, you can access your money if you need it, but to do so you’ll need to do a transfer online or in person.
When you deposit your money in an MMA, it is insured by either the Federal Deposit Insurance Corporation (for banks), or the National Credit Union Administration (for credit unions). You can open a money market account at any bank or credit union - brick-and-mortar or online. If you are looking for a safe place to keep your hard-earned money, but neither a checking or a traditional savings account seems like a good option? Consider a money market account instead. This includes check-writing and debit card privileges, which means you can access the funds more easily if you need to.Īn MMA account traditionally offers a higher interest rate than a regular savings account, but that isn’t always the case in today’s market. A Money Market Account (MMA) is a type of savings account that has additional benefits not offered with traditional savings accounts.