When it comes to saving money, roughly 71% of the U.S. population has a savings account at a bank or credit union, and it’s easy to see why. Savings accounts are a dependable, low-risk way to save for future goals while still earning a nominal return on the account balance.
Though many consumers may see savings accounts as a one-size-fits-all solution, 
there are multiple account types designed to fit various savings needs. If you’re looking for a low-risk savings option that combines attributes of a checking account with the earning potential of a certificate of deposit (CD), a money market account (MMA) could be a great solution.
A money market account is an interest-bearing deposit savings account typically offering check-writing or debit card withdrawal privileges. Money market accounts usually offer a higher interest rate than traditional savings accounts and feature a tiered-rate structure, which means the higher the account balance, the greater earning potential.
Like other deposit accounts, money market accounts are considered low-risk and are insured up to the allowable limits by the FDIC or NCUA.
A money market account’s flexibility and accelerated savings potential make them attractive options for shorter-term savings goals, such as planning a big vacation, setting aside tax payments or upgrading home appliances.
For example, let’s say you’re saving for a big family vacation.
If you open a money market account with $2,000 and commit to depositing an additional $200 each month for two years at a 2.5% interest rate, you will have earned approximately $226.81 in interest alone. Your deposits, or money you contributed, would amount to $6,800 and bring your total balance to $7,026.81. The interest earned alone could be used to upgrade your lodging or splurge on additional activities.
The same benefits that make money market accounts so attractive to consumers also make them a potentially great option for business owners looking to manage their cash flow and save for business expenses.
Money market accounts can be a fantastic option for consumers looking to speed up their earnings while still having quick access to funds. Like other deposit accounts, they’re considered low-risk, and funds are federally insured up to the allowable limits. As with any deposit account, conduct thorough research before opening to ensure it aligns with your financial goals.
If you have additional questions about money market accounts, our team of local bankers is happy to help. Find your nearest branch or open your account online today.
Topics: Manage Your Money
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