subject: Is There a Benefit to Open a Money Market Savings Bank Account? [print this page] For the most part, we the people of the U.SFor the most part, we the people of the U.S. Are spenders, not savers. Now that is giving us a bite. The economic downturn has really given us a ride for the money we are used to spending. We need to re-focus on savings and one way is with a money market account.
A money market account is almost like a regular savings account, however, there are checks that come with it. Usually, you will receive more interest than that of a traditional savings account. With a money market savings account, you are restricted to how many withdrawals per month you can make without being penalized. You also must keep a certain balance. If the balance falls below that amount, you will be charged a fee. Be sure to check the details before opening.
Having understood that, there are a number of noteworthy differences concerning a money market account and a 'regular' savings account. As stated earlier, most money markets will require higher balances than traditional savings and can be as much as $2,500. You will earn higher interest. So, you need to have those funds available to stay there for awhile. Many banks will require a time frame for you to leave open. If you close earlier than agreed (let's say 6 months) you will incur a penalty.
An additional difference is the smooth of access to your funds. Usually, traditional savings accounts will allow you more freedom to your money. Many money market accounts only allow 3 withdrawals per month. The difference is you can write checks from this account.
Remember that the new rules for FDIC have changed and you must be aware of them & how much is insured with each account holder. If you open with a credit union, you will be insured by NCUA.
Prior to you opening your account, be sure you read in the brochure all the details of your money market account. Look for:
1) What is the interest rate ?
2) How does the bank calculate interest ?
3. Are there minimum balances to maintain & for how long must you keep account opened ?
4) How much will you pay to withdraw your money?
Just because our economy is in a turmoil, don't let it get you into a turmoil as well. Remember one of the rules in finances is to pay yourself first. This should be a monthly bill just like all the other monthly bills you have.
How can you benefit from opening a money market account?
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Is There a Benefit to Open a Money Market Savings Bank Account?
