It is very important these days to save money. Most people have savings goals, such as maintaining a sufficient emergency fund, saving for their retirement, or finding ways to fund their children’s education. Opening a money market account is a good way to achieve those savings goals. And there are so many advantages to saving your money in a money market account. A money market account is similar to an interest bearing checking account, however, it is a savings account.
Reasonable Rate of Return
Money markets are often used for investing money. They offer a higher rate of return than a standard savings account or a checking account. Typically, the rates are tiered, so the more money you have on deposit the higher your rate of return will be.
Ease and Convenience
Money markets accounts can be opened at virtually any financial institution. It is easy to make deposits or withdrawals from the account. The funds deposited in a money market account are very liquid, you can access them at any time, and there are no fees or penalties for doing so. You are usually given a check book as another way to access your funds. The checks are personalized and look just like regular checking account checks to depositors or vendors. The account also typically allows 24 hour access via the ATM network, telephone banking, or online banking.
Since money markets are savings accounts, they are insured. If the money market account is at a bank, it is insured by the FDIC. If the money market account is at a credit union, it is insured by the NCUA. Both the FDIC and NCUA insure the funds up to $100,000. And some financial institutions (especially credit union) purchase insurance in addition to the $100,000 for their customers. They are considered a no-risk investment, as there is no risk of losing your investment when the markets or economy declines.
Most financial institutions will combine the statement for your money market account with your other accounts’ statements in one easy to read monthly statement.
Overdraft Protection Source
Many people choose to link their money market account to their checking account as an overdraft protection source to avoid any accidental overdraft or bounced check fees.
So as you can, there are numerous benefits of opening a money market account. If you have something you are specifically trying to save for, a money market account is a great account to help you reach your saving goal.