With so many savings and investment options out there, you might be wondering which one is right for you. If you already have a bit of money saved up and want to watch it grow, but still be able to draw from your account when needed, a money market might be right for you.
Don’t know what a money market is? A money market 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 are 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.
- 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, 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? Check out our rates today, and reach out anytime for more info.
This information is not intended to be a substitute for specific individualized investment or financial advice. We suggest that you discuss your specific situation with a qualified financial advisor.