By Lori Holmes – September 27, 2018
Everybody would love to become a master of savings by paving a way to a rock-solid nest egg. However, for most of us, this is a road less traveled and we wonder how to get there. If this is the case for you, you may want to consider opening a money market account.
Don’t know what a money market account is? A money market account is a type of savings account that typically comes with a higher dividend rate than a standard saving account but requires a higher minimum daily balance. The amount of check writing and withdrawals is limited with a money market or any savings account due to federal regulations. On the plus side, you do have access to your funds at any time, which is different from a share certificate or certificate of deposit that ties up your money for a set period of time. However, because of this, certificate dividend rates are usually higher than money market rates. Below, find a quick and easy breakdown of these three money-savings options.
|Typically higher dividend rates compared to savings or checking||Low dividend rate||Higher dividend rates|
|Variable rate||Variable rate||Fixed rate through the length of the term|
|Limited number of withdrawals per month||Limited number of withdrawals per month||Penalty for early withdrawal|
|Limited check writing and access to ATMs||No check writing. Access to ATMs||No access to your funds through checks, ATMs|
So what route will you take?
It depends on your needs, both immediate and future. Here are a few examples of when it might be a good time to consider opening a money market account.
- You have more money in your savings account than you need on a regular basis. By moving a lump sum over to a money market account, you can earn more for that money.
- You sold a valuable item, such as a second car or antique, and want that money to grow faster, but you might need to use it in case of any emergency situation.
- You want to diversify your savings by having funds in a variety of accounts.
- You received unexpected money as a gift or inheritance. You may need access to it but want to earn the most on it right now.
Take a look at your finances and goals, and make sure you are headed in the right direction to get the most out of your money.
Ready to open a Money Market account? SCU is pleased to offer competitive rates. Check out Click here to check out our rates today, and Click here to visit our Contact Us page and reach out anytime for more info.