If you haven’t given much thought to what a Money Market Account (MMA) is or how to use it, you may have missed out on some of its benefits.

Luckily, David Ning, founder of Money Ning, has thought a lot about Money Market Accounts. His site has covered savings-related topics ranging from “5 Ways to Encourage Your Savings Habit” to “How Much Money Do You Need in Savings.”  

David Ning Shares His Thoughts on Money Market AccountsSo we asked Ning to give us his take on when you should consider opening an MMA, what you should look for and how you can make the most of it. His answers appear below.

When should someone choose a Money Market Account above all other types of interest earning accounts (or even over other kinds of investments)?

A Money Market Account is likely best for a person who can benefit from a savings account but may periodically need to write checks against the balance. The great thing about an MMA is that you have check writing ability, which means that you can issue a check and still have the amount earning interest all the way until the recipient of your check cashes that check and their respective bank makes the transfer.

What should you look for in a Money Market Account?

The first thing you should look for in an MMA is to make sure that the bank is a member of the FDIC, so you’ll know your deposit can be insured up to the limit.

Then there’s obviously the rate that you are getting, too.

You should also expect to pay no fees to maintain your account. But more importantly, check out the miscellaneous fees, such as wire transfer fees, overdraft fees or even fees for printing your checks.

Lastly, you have to make sure you are comfortable with the restrictions each bank usually sets on the accounts, such as minimum balance, funds holding periods, etc.

What kinds of savings goals are best served by Money Market Accounts?

The lines have definitely blurred between a Money Market Account and a savings account, especially at online banks where the interest rates on both products can be exactly the same. I see MMAs as being the best option for people who need to write the infrequent check against balances, but are also disciplined about savings — because it’s still a tiny bit easier to get access to money in an MMA than in a savings account.

What good habits should you observe when saving with a Money Market Account?

Depositors need to be careful not to exceed the six withdrawals per month limit imposed by the Federal Reserve. That’s why it’s still wise to keep a checking account for all the frequent transactions that need to occur on a monthly basis (like paying bills).

Can a money market account be a problem for the undisciplined saver? Is there anything that type of person can do to be more disciplined with their Money Market Account?

If I were prone to go over the six-withdrawal limit on the Money Market Account, I would try to determine ahead of time which bills I would pay with my Money Market Account each month, then just stick with that pre-determined list.

Any other tips for saving with a Money Market Account?

As with any other savings product, the best way to take advantage is to save more.
You should also make sure you are comfortable with the way you can deposit and withdraw money from the account, including making test transactions before your financial life depends on it.

As you consider Ning’s advice and look into Money Market accounts, keep in mind: The Ally Bank Money Market Account is FDIC insured, requires no minimum deposit, offers free standard checks and charges no maintenance fees. Plus, Ally’s Money Market Account consistently offers interest rates that are among the highest in the country. To find out more about Ally’s Money Market Account, click here; to read our FAQs, click here.

How do you use your Money Market Account? How many other types of savings accounts do you have?