As your savings grow, it makes sense to expand your financial portfolio. And experts suggest that you start with the bedrock of a safe, solid emergency savings fund. That savings fund might include a money market account. Rates, of course, are important to take into consideration—but they aren't the only factor.
Consider security. "I always recommend that clients keep their emergency fund in an account that's FDIC [Federal Deposit Insurance Corporation] insured," Chris Long, Certified Financial Planner at Long Financial Planning, Chicago, told Ally Bank in an interview. "The whole point of an emergency fund is that it can be 100 percent safe and 100 percent available—you can't play around with it." The same holds true for money you're accumulating for shorter-term goals, such as buying a first home. "Even if inflation is running at 2 percent and you're earning only 1 percent in a money market account, in the short run, that won't amount to any material degradation of your funds," he said. "You just a need to be a little patient, because the alternative—putting money in a riskier investment and then having it not be there when the perfect house comes along—isn't worth it."
Also consider maintenance fees and minimum balance or deposit requirements. Some banks charge monthly maintenance fees or fees for going below a minimum balance. Why pay those charges if you don’t have to? The Ally Bank Money Market Account has no monthly maintenance fee. Plus, we compound interest daily to maximize your return.
The key to a balanced portfolio is understanding that you need an asset-allocation plan, and that you should update that plan periodically. You can learn more about asset allocation and how money market accounts and stock and bond funds can work together at the Securities & Exchange Commission's website. Always consult a financial advisor familiar with your situation to make the best decisions about your financial portfolio.
If you want to add a money market account to your plan, take a look at ours. With an Ally Bank Money Market Account, you earn a variable rate that's consistently among the most competitive in the country according to Bankrate.com, and you can open and fund your account with any amount. You can use any Allpoint no-fee ATM—plus receive up to $10 reimbursement for fees charged at other ATMs nationwide each statement cycle. You also get free standard checks and a debit card for convenient access to your money. And your funds are insured by the FDIC up to the maximum amount allowed by law.
Learn more at Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559).
Ally Bank, member FDIC