Money Market Savings Account

There are several types of savings accounts you can select to put your money in. For example, there are:

• Regular Fixed Rate Savings Accounts
• Holiday Accounts (Christmas Clubs)
• Individual Retirement Accounts
• Money Market Accounts

A money market account (MMA) is a deposit account that is considered a savings account. It offers a higher-yield interest rate so you can earn faster than on a traditional savings account.

Following are some components of a money market account:

Insured: As with other bank savings accounts, money market accounts are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per depositor, per bank. This means that if the bank ever goes under, you will receive your funds up to that amount.

Interest Rates: Money market interest rates are typically higher than savings account rates. For example, a savings account may have a 1.30% annual yield and a money market may have 1.40%.

Features: You can usually receive an ATM card and write checks against the funds which are available 24/7.

Restrictions: You can usually only write a certain amount (three to six) of checks per month against your account. In addition, the number of times you can withdraw money may be limited. For instance, you might only be able to withdraw six times per month without incurring a penalty.

Also, you usually have to deposit a higher amount (maybe $1,000) to open the account. If you fall below a certain minimum you could be subject to penalties or even closure of the account.

Fees: Most banks charge a monthly fee on the money market balance. For example, one bank charges $8.00 per month whenever the daily balance is above $1,000. You may also be charged a fee if you go over the maximum number of allowed transactions.

Finding a Money Market Account That’s Right for You

As with a savings account, there are a wide variety of money market accounts to select from in the marketplace.  In addition to the features listed above, some may require that you maintain a current checking account with the institution.

In fact, the terms can vary so much in money market account offerings, it is a good idea to do research on accounts available from banks in your area as well as from online sources.

Once you are fully informed about your options (including other savings account vehicles), you can make the best savings choice for your financial situ