Interested in a mixture of an savings and checking accounts? Then check out a Money Market account!
A money market account is an interest-bearing account that typically pays a higher interest rate than a savings account, and which provides the account holder with limited check-writing ability.
They boast interest of their deposits, easy access to your account and the ability to write checks.
These accounts are best used for making large and infrequent expenses such as emergency funds, tuition, budgeting for quarterly tax payment and more. If you’re interested in this account, check out the features below! Check out our Bank Bonuses, Saving Rates and Credit Card Bonuses!
Money Market Features
Basically, a money market account is a type of savings account with some checking account features.
Typically, these types of accounts come with checks or a debit card that allows a certain number of transactions each month.
Here’s a list of some features that these accounts have to offer:
- Higher Interest Rates Than Savings Account
- FDIC Insured or NCUSIF Insured
- Most accounts let your withdraw cash or checks, but there is a limit
- Has a minimum account balance, if you fall below it you incur fees
- Transaction limits
Pros and Cons of Money Market Accounts
If you’re wondering if money market accounts are worth it, it all depends. Consider the following pros and cons when you’re deciding on opening an account:
Pros
- Receive some of your bank’s best rates.
- Access funds more easily than with most savings accounts, which might be helpful in an emergency.
- Have a safe place to keep a large chunk of money, protected by FDIC insurance.
Cons
- Funds might be too easy to spend.
- Some accounts require high minimum balances to open or avoid fees.
- In many cases, savings accounts pay just as much interest.
If the bank your do your business with pays similar rates on its standard savings account and its money market account, then you might as well stick with your savings account.
This way, you can avoid the cons of having a money market such as the high minimum balance requirements. However, if the money market rate is higher than normal and you can afford the minimum, then definitely sign up.
How To Choose A Money Market Account
If you end up deciding that a money market account is your best option, check out ones with a high interest rate and no monthly fee.
Additionally, the account should have a reasonable minimum balance. Some institutions may even require you to deposit $10,000 or more to open an account.
Although it is hard to find, you may even be able to find an account with a $100 minimum balance.
Money Market Accounts vs. Money Market Funds
Don’t get Money Market Accounts mixed with Money Market Funds. Unlike Money Market Account, Money Market Funds are mutual funds that buy securities, so it’s possible to loose money with those funds.
Thankfully, these accounts are FDIC Insured or NCUSIF Insured if they are with a credit union. Money market mutual funds might come in more varieties and offer the potential for tax benefits, but a money market account offers you safety.
Compare Money Market Accounts
 • Get started and open a Discover® Money Market Account in 3 easy steps. • Available nationwide online • Earn high yields with flexible access to your cash. • Earn 4.05% APY balances $100,000 and over • Earn 4.00% APY balances under $100,000 • No hidden fees. No surprises. • Easy cash access via debit or check, or via ATM at over 60,000 no-fee ATMs |
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Bottom Line
If you’re looking to make an account for emergency funds, tuition payments or any large amounts of money for infrequent expenses, check out Money Market Accounts.
You’ll earn a higher interest rate than traditional savings accounts but there is a limit of transactions and minimum account balance.
Additionally, they are FDIC Insured or NCUSIF Insured if they are a credit union. Check out our Bank Bonuses, Saving Rates and Credit Card Bonuses, here on HMB!
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