KNOWLEDGE CENTER: Looking to increase your savings with easy access to your money? A money market account can be a good choice. [Column] | Business
These days, many Americans find themselves with excess cash in their checking accounts due to reduced spending, stimulus payments and more.
While it is much safer to keep money in checking accounts than it is to put money in the house, there is another great way to save your extra cash – a money market account – in all. security with access as easy as your checking account.
What is a money market account?
A money market account allows you to take your money and earn interest over any period of time, essentially investing your money to earn interest instead of relying on a long-term investment like real estate or a mortgage. retirement funds.
Since the assets of a money market account are considered liquid, you can manage deposits and withdrawals from your money market account using direct access without penalty for early withdrawals like some other investment accounts.
How to manage a money market account?
Managing a money market account is as easy as managing a checking account or a traditional savings account. When you open a money market, you receive a debit card and online and mobile access. If you link the money market to your checking account, you can quickly transfer funds between the two accounts.
Money market accounts also don’t have a limit on how many deposits you can make per month, allowing you to add funds continuously through direct transfers.
Keep in mind, however, that federal regulations limit you to a maximum of six pre-authorized withdrawals, direct or telephone transfers, checks, drafts and debit cards, or other similar transactions from your account per month or statement cycle.
How is a money market different from regular savings?
Money markets can offer higher interest rates than traditional savings accounts, with the same level of flexibility.
Opening and monthly balance requirements vary by financial institution and type of product, such as a high yield money market account, compared to traditional savings accounts, so check with your bank to see which rates. are available for both types of accounts and which one is the best fit for you.
The most important thing is that you save!
Are Money Market Accounts Safe?
First, it is important to distinguish a money market account from a money market fund. Although they appear to be similar in name, they are very different products.
A money market fund puts your money in investments such as mutual funds, which carry low risk but are not FDIC insured.
Like traditional savings accounts, money market accounts are FDIC insured up to $ 250,000 to protect your money. And because this is a savings account tied to interest rates, not the value of specific stocks or investment funds, your money will continue to grow safely and earn for you without the fear of losing money – all with the easy accessibility you may need for an emergency, vacation, or a major purchase.
Shari Kruzinski is Executive Vice President, Director of Retail Delivery at WSFS Bank. His career spans over 30 years in banking and with WSFS. In his current role, Kruzinski leads overall market strategy, customer development and sales management for the Bank’s retail branch network and customer contact center.