Money Market Savings Account Are They A Good Idea To Save Money

 

If you have been thinking of using money market savings accounts for a while now, it is important that you know what these accounts actually are and how they will benefit you. It is true that money market savings accounts are considered to be high interest savings accounts but at the same time there are certain points that might make you see them in a different light. Let us see here whether these accounts are something that you need to consider to build up your funds.

First of all, we need to see what money market savings accounts are. These are deposit savings accounts with a higher rate of interest than usual bank accounts. One of the most important advantages of having such an account is that the notice period for withdrawal is very short if it is present. Also, the money that is deposited in these accounts is protected by the regulations of the Federal Deposit Insurance Corporation, which means that even if the financial institution shuts down operations, the money deposited in it is not forfeited.

So, there are advantages and it might seem it quite worthwhile to have one of these money market savings accounts for your needs. The two main aspects of any savings account – high interest rates and low withdrawal periods – both apply to savings accounts, making them seem good options. But then, there should be some catch somewhere, right? The truth is that there are certain things you have to know.

1. One of the first things that you have to remember here is that there might be a maximum number of withdrawals that you can make from the account. There are money market savings accounts that will allow you to dip into the account as many times as you need to withdraw money, but then there are also accounts with a maximum limit on them. That could be a dampener for a running business if you are depending solely on this account for your transactions.

2. Though most of these accounts consider your deposit applicable for interest even if it is as low as $1, there are accounts that will need you to have some minimum balance in the account each month. This can again be a problem if you are strapped for cash, especially in the initial stages of a business, for example. The accounts that have a requirement of a minimum deposit per month will not give any interest for the month that the requirement is not met. So, even if there is a high rate of interest attached with the account, it might not work if there is this requirement to be met.

3. Money market savings accounts are also subject to fees like any normal savings accounts are. There are free accounts out there too, which do not impose any fees on the account apart from their normal account handling charges, but some accounts might charge more beyond a particular number of withdrawals or even penalize the accountholder for not maintaining the minimum balance.

But you must remember that these points do not apply to all money market savings accounts. So what you really need to do is to read the fine print so that you clearly understand all the points that apply.

Thank you for reading,

Article submitted by: Jose Amoros

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