If you think you're ready to venture out of the checking and savings account world and see what other options are available, you’ve come to the right place. Enter the money market account: a savings option with higher earning power.
What is it? A money market account is a deposit account that earns dividends based on the current rates. These can fluctuate and are usually better than the average savings account rates. Because you’re earning higher dividends, these accounts typically have a minimum required balance to start earning dividends and limit you to six monthly withdrawals. For example, Member One’s money market accounts have no minimum balance to open, but there must be a minimum balance of $2,000 to begin earning dividends.
What are the benefits? This account allows the money that might be sitting in a traditional savings account to earn more dividends. Also, unlike share certificates or certificates of deposit (commonly referred to as CDs), there is no time requirement. For example, CDs can offer very high interest rates; however, you’re required to keep that money in the account for a pre-determined amount of time. With a money market, your funds are available to you whenever you need them.
Who should get one? If you have a large balance sitting in your savings account and want to earn more, a money market account might be a good option for you. You’ll still have access to your funds if you’re not quite ready to commit several months or years to a share certificate or CD. You won’t see immediate gains like you could with the stock market; however, it’s a good start if you’re not quite ready to take the higher-risk stock market plunge.
Interested? Get in touch with your financial institution. Get information on the dividend rate, the minimum balance required to earn dividends, and if they offer tiered options (i.e. the more you save, the more you earn). Member One offers money market accounts with tiered earning levels and competitive rates. Click here to view them now.