What makes a money market account unique from other interest-bearing accounts
(TURN INTO FULL PARAGRAPH) is that these types of accounts pay a tiered variable interest rate (different rates) determined by how much money you have in the account. These rates will vary depending on the current interest rate within the money markets. The interest rate offered is usually more than a typical savings account but can fluctuate depending on market conditions.
Who doesn’t want to save money?
Money market accounts provide a very safe method of storing finances while simultaneously earning at least some interest. Many banks and credit unions offer these accounts along with interest rates as high as 5%, and they often place characteristics of both savings and checking accounts. We know how hard it is to save up for an initial down payment on a home, and money market accounts help take some of that unwanted stress off your hands. To explore more of the pros and cons of putting your funds in a money market account, look at this educational article by Forbes.
How to know if a money market account is right for you
One of the main must-know advantages of a money market account is being able to use checks or a debit card linked to the account WHILE you earn interest. Another great thing to know is that $250,000 is insured for each individual owning an account, and up to a maximum of $500,000 is federally insured for joint accounts.
The minimal downsides of a money market account
One of them is a requirement of a down payment slightly more than your average savings account. Typically they are around $1,000. There are also a few regulations regarding transfers and withdrawals so be sure to do your research! You can click this link to read an article that specifies those restrictions. At the end of the day, money market accounts won’t hurt to consider, especially when preparing to make mortgage payments, take out a home loan, refinance your home, or even increase your home equity.
A short guide to money market accounts
To summarize, a money market account is unique compared to other interest-bearing accounts like savings accounts, high-yield online savings accounts, and certificates of deposits. What makes it unique is that they tend to pay the account owner higher interest rates than the other account types, there are usually no minimum balance requirements, and they also allow you to pay bills, use a debit card, and write checks. Deciding whether or not a money market account is a good fit for you is based on what it is you are looking to get out of an interest-bearing account as well as what things you will be using it for, such as mortgage payments, saving up for a down payment, and maybe even preparing to take out a home loan. To figure out what account type is right for you, there are many different articles, such as an article called “What is an Interest Baring Account,” which has a lot of great information, as well as our site, which provides more information on what a money market account would mean to you.