I’ve long been a proponent of each person having a savings account but they have some drawbacks. Chief among them are the inaccessibility of your cash and the dismal interest rates – just slightly above the “keeping it under the mattress” rate. Is there a better place to park your money? Is there a better place to keep your emergency fund than just a savings account — particularly one that earns little to no interest?
Consider a money market account!
A money market account is a type of savings account that gives you better access to your money. It’s a savings account with checks! Federal law allows you to make up to six withdrawals per cycle, though your deposits can be unlimited. And your account is FDIC insured. Not a single person has lost money in a bank or credit union that was insured by the FDIC since it began.
Money Market vs Certificate of Deposit
You may be able to get a better rate with a CD, but access to your money will be very limited. Take your money out before the term of the CD ends and you’ll pay an interest penalty.
Money Market vs Savings Accounts
Again, your money isn’t as accessible when it sits in a savings account. You may be able to get a decent rate with an online bank, but most traditional (grounded) banks have horrendous rates – about one quarter of one percent.
Money Market vs Checking Accounts
You may be able to get a PerkStreet account that will reward you for purchases (estimates are around $600 per year), but if you don’t go with them, you will probably have a difficult time finding a decent interest rate on any checking account.
Money Market Accounts Rule
Going with the EverBank Money Market account means:
- Your money is insured by the FDIC up to the maximum amount allowed by law
- You’ll consistently earn high yields
- Free mobile and online banking
- Easily transfer funds between an EverBank account and other financial institutions
- $1,500 minimum opening balance
If the opening balance is out of reach for you, there’s still hope! The Ally Bank Money Market Account has its own set of great features:
- Open with $0
- No minimum balance
- No monthly fees
- Check card and first 50 checks are free
- No ATM fees at any ATM
- Daily compounded interest for maximum earnings
Discover Bank money market accounts are another alternative. They have variable rates depending on your opening deposit.
Consider opening a money market account. You’ll get better rates and still have the access you need to your money should an emergency arise.
Note: This article was included in the Carnival of Persona Finance #295 at Taking Charge, a CreditCards.com website. Thanks for the inclusion!
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Thanks for the tips. I agree that keeping money in a savings account is really not a good option. I will try to implement some of the given points and hope to get good results.