Money Market Accounts versus Savings Accounts

Everybody wants to save something. With the present economic condition that we are experiencing right now, there is no doubt that anyone would want to squeeze something out of their expenses. With this scenario, there is one question that we always ask ourselves. Where would I put my savings?

It is question that needed careful examination in order to come out with a plan for us to come out with a convincing answer. There are many ways to help us save money. But the point is it would be better if our savings would gain more. Aside from the money to be safe and sound, we want that it should also gain interest for our benefit.

This is where the idea of money market accounts kicks in. Well, money market accounts are similar with a typical savings account in many ways. But there are important factors that distinguish it from savings account. Interest rate, minimum balance requirement and number of withdrawals per month are the major distinction of savings account and money market accounts.

Interest rate is a very important factor in savings. Money market accounts are yielding more than savings accounts. This type of account can be beneficial for those who want to save something for the future. Well, savings account can gain interest as well but money market can give a higher yield.

Savings accounts are gaining interest but only in a minimal amount. Money market accounts can give more. So, if a person is looking for a better interest rate in order for their money to earn more, money market account is the right choice.

But the story doesn’t stop in interest rate actually. Another additional feature of money market account is the minimum balance requirement. Compared to savings account, the minimum amount needed to maintain a money market account is higher. The interest rate is better but you are required to invest more. The minimum deposit may vary according to banks requirements. So, to check what are the minimum amount needed to open a money market account, it is wise to find out with your bank first.

There are many available resources in the internet if you are looking for financial institutions that can offer a money market account with great rates as well a low maintaining balance. Aside from the choices, you can compare rates as well. So having the lowest required minimum balance and competitive rate will be something that the internet can give you.

Going back to the features of money market accounts and saving accounts, let us take a look in the transactions per month. On savings account, you can access the money anytime and as many times as you want within a month while money market on the other end will give restrictions. Most banks will only allow maximum of six withdrawals in a month. Aside from that, there are also fees associated with it if you exceed the required amount of withdrawal.

Before getting a money market account then, it is wise to review the restrictions, especially the fees to avoid paying more than what your money is earning. If you fail to do this, your capital might be at risk.

For a person who have the amount but is conservative in investing it, money market account will be a good choice. Aside from the fact that the money is safe because it is insured by the FDIC, you can relax while watching your money grow. Your money will be there and while you are not yet decided whether to take a more aggressive approach for investments, let it earn interest for the meantime while waiting for the perfect timing for larger investments.