If you have a large sum of money in your savings account, where should you keep it? Some people might recommend opening a certificate of deposit, while others would suggest opening an investment account and investing your money in a mutual fund. While there's nothing wrong with either of these choices, there’s another option that tends to get overlooked–the money market account.
That’s kind of unfortunate, because a money market account has some features that make it a worthwhile consideration for anyone with a few thousand dollars in their savings. In fact, once you know what a money market has to offer, you might want to make it one of your main savings accounts.
The most obvious advantage a money market savings account offers is a higher rate of interest. Granted, you won’t get rich off the interest, but you will get an exponentially higher rate of interest than you would if you were to keep your money in a traditional savings account.
This higher interest rate can be an especially important step for people new to saving. After months of putting aside money, you finally have the chance to see how interest can make your money work for you. Even better, you can keep making deposits to your money market account and watch your money earn even more interest.
In addition to being able to easily make deposits in your money market account, you’ll also be able to withdraw money from it with the same ease as you’d have getting money from a traditional savings account. This not only includes being able to get money from a branch, but also having access to your money through ATM withdrawals and checks.
It’s worth pointing out that this access to your funds makes money market accounts extremely useful when you want the benefit of a higher interest rate but might need to withdraw your money immediately. You might encounter this situation if you have:
While investing in a mutual fund or individual stocks can potentially give you a fantastic return on your investment, you also run the risk of losing your money. If you put your money in a money market account that is federally insured by the National Credit Union Association, though, your money will be insured up to $250,000 per person, per type of account, per financial institution. That means unless you're fortunate enough to have more than $250,000 in your account, you won't have to worry about losing your money, even in the unlikely event your credit union fails.
If you’re looking for a place to put thousands of dollars in savings, a money market account might be just what you’re looking for. It’s got a higher rate of interest than traditional savings accounts, and you can not only deposit money as often as you’d like, but also withdraw it when you need it. You can also rest easy knowing that your money is safe up to $250,000 per person, per account type, per financial institution
If you’d like to learn how to open a money market account, all you have to do is become a member of First Alliance Credit Union. Once you’ve got an account, a member experience advisor will be happy to help you open up a money market and even show you how to transfer money between accounts using our online banking platform and mobile app.