When you think about savings, you probably think about a savings account. But saving with a Money Market Account is the better way to go. Although a general Savings Account is a reliable option for the safe storage of your money, it is not always the smartest. Gone are the days when 10% of the shares are offered. The current average return is 1.4% per year. Knowing how to save in everyday life is beneficial to long term success.
This means that you can expect a few dollars at the end, although it usually does not require an annual fee. If you want to use your money, a Money Market account is the right investment choice for you. A Money Market Account usually has higher interest rates. Although keep in mind there can be both risks and opportunities.
Interest Rates When Saving With A Money Market Account
Many people who are interested in opening a money market account are enticed by the interest rate – and this is understandable. In the end, you want your money to work for you more when you save. Saving With A Money Market Account will usually include higher interest rates. This means that you get more if you do the same as keeping money in a classic savings account.
This is because money market accounts are grouped into another fund, which is used by investors to generate higher returns. This more aggressive form of investment can lead to a loss of funds , but it is very unlikely and has not happened so far. Given the low risk, higher interest rates are usually considered a reasonable compromise.
Access To Funds When Saving With A Money Market Account
Another advantage is that you have more access to the money you deposit into it. Unlike a savings account, where you can withdraw money no more than a few times a month. You can usually withdraw money or make transfers six or more times per statement. In addition, most banks give you the opportunity to issue checks directly from them. Moreover, at many banks, you can also connect a debit card to your account to facilitate withdrawals and expenses. This provides more flexibility than a standard savings account.
Saving With A Money Market Account Has Better Returns
Money Market Account interest rates give you a much higher chance of investment return. Annual APY is about 2% or more. The return you can get is much higher compared to mutual funds and exchanges. There are some banks that even offer rewards as a bonus in the first months after opening an account. The monthly balances required to maintain rates are also much lower.
As mentioned above, these accounts don’t lose money. This makes them a safer place to leave your money and at the same time get a reasonable return. Given the volatility of the stock market, this is by far the best investment guarantee for saving and building up your funds.
The next time you wonder what a money market account is, you can think of it as a stable alternative to low-risk savings accounts that can be used to conveniently issue checks and at the same time get a competitive rate for your savings. With all these advantages, it is not surprising that cash accounts are one of the most popular financial products of banks.
Remember that interest rates can change daily. Thus, if you find an attractive interest rate on the market account, you should take advantage of higher interest rates when you find them because they may not be available tomorrow.