Saving money is always a good thing, but not everyone wants to commit. Ask yourself if you are indeed ready to get down to business and get serious about your savings. Maybe you have a big payment coming up in the next few months like college tuition, a home mortgage, rent, or even big taxes in April. Or, you just want to squirrel away some money for the inevitable emergency travel, auto repair, or medical bill.
Whatever your reasons, a money market account can be 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 what you need to know about opening a money market account.
Determine 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 — as a trade-off 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.
Learn 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 – it depends on the financial institution. So, if you start with the understanding that the primary purpose of a money market account is to save money, transaction limits shouldn’t be an issue. Plan out the purchases you’ll make on a regular basis with your money market savings and leave a little wiggle room for emergencies that might spring 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 nice 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 surrender security in the process. When you make deposits in your money market account, you can be rest assured 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. As a result, you can let your money accumulate interest and 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 the perfect way to save for your future, not to mention those big upcoming purchases that require some forethought and planning anyway.