Should I Put My Funds in a Money Market Account?
posted on Friday, February 11, 2022 in Financial Tips
Finding ways to store your money can be quite a challenge. As you consider different ways to deposit your money, you may encounter money market accounts while doing your research. If you are unaware of what they are and what they can do for you and your money, read on to learn more.
Money Market Accounts Defined
A money market account is a deposit account offered by financial institutions similar to a savings account. However, you can write checks or get a debit card that you can use for purchasing. It has a higher interest rate than savings accounts and offers additional features not provided by other account types.
They are different from money market funds, which are low-risk and low-return investments. Money market funds invest in liquid assets such as cash and cash equivalent securities.
Benefits of Money Market Accounts
Now that you know what money market accounts are, here are a few benefits you can get from opening an MMA. Familiarizing yourself with the benefits can help in your decision to open an account.
- The Money Is Secure – The money you’ve invested in an MMA is insured by the National Credit Union Administration (NCUA) up to $250,000. So, should your financial institution fail or close down, you can be sure that you still have some money left. Because of this, it carries a lower risk compared to other investments such as stocks and bonds.
- Easier Access to Your Money – Unlike savings accounts, money market accounts offer easier access to your funds. You can have a debit or ATM card so you can get money whenever you need it. Online transfers and payments are also easier compared to savings accounts. Keep in mind that because MMAs are under Regulation D of the Federal Reserve, withdrawals are limited to six per month.
- Higher Interest Rates – Traditionally, money market accounts have a higher interest rate compared to savings accounts. Having your money in an MMA can help you earn more compared to a savings account.
Money market accounts are a great way for you to save and earn some money at the same time. If you want to learn more financial tips, contact Community 1st Credit Union today. Our C1st representatives can help you achieve your financial goals.