Saturday, March 28th, 2020
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The most important question you can answer when it comes to saving your money is this: “What kind of account should I save my money in?” Enter money market accounts!
If you are looking for a place to park your savings dollars and want an account that blends accessibility with an above average rate of return? Then choosing to open a money market account could be the perfect financial option for you!
Before we dive into understanding the five advantages of a money market account, let’s compare and contrast a money market vs savings account.
First off, savings accounts are an ideal place to store money you want to have for emergencies, special purposes, or long-term savings at a conservative rate of return.
Typically savings accounts have a transaction limit of how many times you can transfer money to and from the account, and minimum balance requirements vary from institution to institution.
In a similar fashion, money market accounts are a great option for storing money for an extended period of time – whether 6, 10, 12, or more months.
An important difference between savings accounts and money market accounts is that they most certainly have minimum balance requirements.
However, it’s important to remember that minimum balance requirement is usually offset by an attractive rate of return (often higher than regular savings accounts), which varies from institution to institution.
Money market account risk is very low since it’s not dependent on the stock market, per se, but rather determined at a financial institutional level.
While the differences between money market accounts and savings accounts are subtle, understanding their nuances will help you decide which financial instrument to choose for you.
You may be asking yourself, “Can you lose money in a money market account?” No, because the funds in your money market account are insured by the NCUA up to $250,000.
This means you can keep a large sum of money in your account without the risk of losing it to a market crash or a poor choice of investment. It’s a great opportunity to start saving with confidence!
One of the most attractive features of money market accounts is the liquidity of funds. Money markets have no maturity date or term requirement. This affords them ease of access that other savings vehicles, like share certificates, do not have: You are free to access the funds in your account at any time, usually without penalty.
If you are considering using a money market account for your long-term emergency fund, keep in mind that there are restrictions on the number of transactions you can make a month, which vary from institution to institution.
The accessibility factor of Money Market accounts is extra convenient for members who don’t know exactly when they will want to withdraw their funds. Because of this uncertainty, they are important to consider for large, occasional expenses like tuition payments, emergency household repairs, and unexpected medical fees.
You could use your money market account for putting away a tidy sum to use as spontaneous splurge money when the desire strikes. Or, you can keep your quarterly tax payments in your money market account until they’re due so you earn more dividends on this money while it’s waiting to be spent.
Whatever purpose you have in mind for your funds, a money market account is an ideal place to keep them.
Money market accounts offer a rate of return that surpasses your typical high-yield savings account. This is especially beneficial in a rising-rates environment when those rates are only expected to increase. Give your money its best chance at growth!
Depending on which institution you choose to open your money market account with, your account may come with lots of unique benefits and attractive features.
Thoroughly exploring and researching financial institutions is a best practice which can lead to you not only finding a high interest rate, but also finding an institution that you enjoy being a part of and benefit from.
Money market accounts offer some flexibility. Can you write checks from a money market account? Yes, you can easily transfer funds or use the funds to make payments by writing personal checks or using your debit card.
This flexibility means you can use that money in a pinch without any major effort or waiting for a withdrawal to clear.
Are you ready to start saving big with an attractive interest rate? Open a money market account at AGCU today! Contact one of our representatives today to open your account! Call (417) 831-4398 or fill out our contact form and we will reach out to you!