Safe and Smart Saving with a Money Market Account

Unfortunately, Money is one of the necessities in today’s world and it can be a headache to manage properly; finding an effective way to do so is vital. A money market account is not only a good way to manage one’s savings; it is also an excellent way to make one’s money grow steadily. If you are looking for a way to make your money grow at a rapid pace in the shortest amount of time possible, perhaps a money market account is NOT the way to go about it. What it does offer, though, is a safe, low-risk and no-nonsense path toward financial growth and management.

Setting Up and Maintaining a Money Market Account Is Easy

A money market account is an excellent vehicle for someone to set funds aside and let it grow in the short term. Let’s say you plan to take your family on a tour of Europe next year but you’re still quite short on the funds you need for the trip. Or you simply have extra cash that you want to keep in a safe place while you determine an investment strategy for it. Going to a bank or credit union to open a money market account is simple and if you comply with certain rules and regulations, the balance in your account will grow because of the interest it will earn – which is similar to the way a regular bank account earns interest.

Money Market Accounts vs. Bank Accounts

Yes, a money market account is similar to a regular bank account, but there are some important differences as well. For one thing, since money market accounts have higher minimum balance requirements, much higher interest is paid as well. Moreover, money market account interest is usually compounded daily – meaning, interest is paid by the bank or credit union on the interest the deposit has already gained. Also, similar to a regular bank account, money market account holders can write checks or withdraw funds through transfers and ATMs.

However, unlike a basic bank account, withdrawals from a money market account are limited to a certain number of times monthly. Also, a certain balance must be maintained in order to qualify for higher interest. If the account holder exceeds the allotted number of transactions or balance falls below the minimum amount, fees may be charged.

Peace of Mind with a Money Market Account

Like regular bank accounts, the funds in money market accounts are insured by the U.S. Federal Deposit Insurance Corporation (FDIC), so you can be sure that you will still get all or at least part of your money in the unlikely event that the financial institution you’re dealing with goes out of business. Just remember that the more money you place in a money market account, the higher the interest it will earn. So whether you’re planning to take a European vacation next year, saving for your child’s college expenses, or simply want your money to grow as you ponder a higher-yielding investment, a money market account is a tool to lessen the headache that sometimes comes with financial management.