If you already have a checking account and a traditional savings account - not to mention a certificate of deposit (CD) or two - you may be thinking, "That's good enough for me. Why should I be looking at a money market account?"
Depending on your financial goals, of course, a money market account may not be the obvious choice, especially if you're comfortable with your current financial account mix. On the other hand, if you're not familiar with these accounts, you may wonder, "how does a money market account work anyway?"
Money Market Account Basics
Money market accounts combine many of the features of other bank accounts. A common money market account definition often will note that it functions something like a savings account, but with limited checking account privileges.
The yield provided by the top money market accounts, however, means they also can provide rates of return that may be competitive with some CDs, while not locking your money up for a specified time as CDs do.
Because of they combine competitive rates of return with greater flexibility, "money market accounts are a good 'middle course' between savings accounts and CDs," notes Alex Lluch in his consumer financial guide Personal Finance Made Easy.
Who is a good candidate for a money market account?
Cathy Pareto told Ally Bank in a recent interview that the ideal customer for a money market account is somebody who needs to set aside some financial reserves for emergencies; or perhaps someone who's in a transitional period, maybe about to switch jobs or homes or putting aside savings for a new baby. Pareto is a certified financial planner with Cathy Pareto & Associates, Inc., Coral Gables, Florida, and she added that money market accounts are a good way to save for those big expenses.
Your funds in money market accounts at most banks - including Ally Bank - also are insured by the Federal Deposit Insurance Corp. (FDIC) up to the maximum amount allowed by law, which makes them a very safe place to put your personal savings.
This insured security also means they may be an attractive option for people who've reached the stage in life where they don't want to risk their nest egg chasing higher returns. They can be good for somebody who's older and doesn't want to subject themselves to the vacillations and swings in the market, Pareto said.
The Ally Money Market Account: High-Yield Savings with Debit Card Convenience
You can open and fund an Ally Money Market Account with any amount, and when you do, you're tapping into the convenience of online banking while earning interest at a variable rate that's among the most competitive in the country according to Bankrate. Unlike some banks, we won't charge you a monthly maintenance fee, and you'll get free standard checks and a free Debit MasterCard®. You can use any ATM nationwide without worrying if we'll charge you a fee (we won't), and we'll even refund the ATM fees other banks in the US or nationwide charge to access their ATMs.
Learn more about the Ally Money Market Account and open yours at AllyBank.com or by call 877-247-ALLY (2559), where customer care representatives are standing by 24/7 to answer your questions.