Oct 18, 2018 / Money Tips
Are you ready to get serious about your savings? Maybe you have a big payment coming down the road like tuition, mortgage, rent, or taxes. Or, you just want to set aside some money for the inevitable emergency travel, repair, or medical cost. Whatever your reasons, a money market account is a great way to save for large, infrequent expenses. It gives you the flexibility and convenience of a regular savings account with a higher interest rate on your deposits. If you’re ready to get serious about your savings, here’s everything you need to know about opening a money market account.
Set a Deposit Amount
Because a money market account gives you a higher yield than most traditional savings or checking accounts, it makes sense to have a minimum balance, both as a tradeoff for a better interest rate and to take advantage of the higher yield. Decide how much you can deposit in your money market account and be aware of any ongoing minimum balance requirements. And because many banks and credit unions have a tiered interest system, depending on how much money you deposit, make sure you’re taking advantage of the highest rate you can afford.
Understand Transaction Limits
When you set up a money market account, be aware that you’ll be limited to a certain number of withdrawals per month – usually six. But if you go in with an understanding that the primary purpose of a money market account is to save money, transaction limits shouldn’t be a problem. Plan out the purchases you’ll make on a regular basis with your money market savings and leave a little leeway for emergencies that might pop up. With a structured payment schedule, you’ll always know how much is in your account and how much you’ll need to put back in to avoid penalties and keep earning the most interest possible.
One of the best things about a money market account is that it gives you the ability to separate your savings from your day-to-day transactions while earning a higher interest. But you don’t have to sacrifice security in the process. When you make deposits in your money market account, you can rest easy knowing that your money is federally insured up to a certain amount. It’s a no-risk, higher reward savings plan that’s perfect for making infrequent large expenses. So, you can let your money accumulate interest worry-free until you need to pay your planned or emergency expenses.
Get Serious About Savings
If you’re ready to get serious about your savings, consider opening a money market account. It gives you the best of everything a savings account can offer—convenience, security, higher interest, easy access. And it’s a great way to save for the future, not to mention those big upcoming purchases that require a little planning anyway.