When it comes to earning interest on your money, savings accounts aren’t the only choice. Money market accounts, or MMAs are another popular savings option. If you aren’t familiar with the features of this flexible, alternative savings account, now is a good time to learn more.
Read more: What are the differences between a savings account and money market account?
What is a money market account?
Much like other bank deposit options, such as savings or checking accounts, you put money into a money market account and the bank pays interest on your balance periodically according to the terms.
An MMA may offer higher interest rates than a traditional savings account while providing the added convenience of check-writing and debit card access.
How does a money market account work?
Opening a money market account is simple. In most cases, you provide your personal information, make an initial deposit, and the account is ready to use. Keep in mind, some banks have minimum deposit amounts or balance requirements, but at Ally Bank, we don’t have either.
Pros and cons of money market accounts
Is a money market account right for you? Consider the advantages and disadvantages.
Pros A money market account offers several benefits, including:
Potentially higher interest rates: Compared to traditional checking and savings accounts, MMAs may offer better rates.
Federal Deposit Insurance Corporation or National Credit Union Administration insured: With an MMA, your funds are protected up to the maximum amount allowed by law, making it a safe place to keep a large portion of money.
Flexible access: An MMA provides you with easier access to your funds via check and debit card, which can be handy for daily spending or in an emergency.
Cons
Before deciding to open a money market account, consider the below:
Potential minimum balance fees: Some financial institutions require high minimum balances to open an account or avoid fees. An Ally Bank Money Market Account does not have a minimum balance requirement.
Monthly transaction limits: At Ally Bank, we restrict certain types of withdrawals and transfers from savings and money market accounts to a combined total of 10 per statement cycle.
Interest rates may change: Since MMA interest rates are variable, they can fluctuate depending on market conditions.
When to consider a money market account
An MMA is a great account for anyone looking to build an emergency fund, save for a short-term goal or manage funds for regular expenses while earning higher interest than average. So, if you’re looking for a savings option that offers competitive interest rates, easy access to funds and FDIC insurance, a money market account could be just what you need.
Are money market accounts safe?
Money market accounts at FDIC-member banks are insured by the FDIC up to the maximum amount allowed by law.
Find the right money market account for you
As you consider your money market account options, remember, all banks are not created equal. Look for competitive rates, convenient access, clear terms and strong customer service. This will identify a money market account that fits into your overall savings plan and helps you safely save for the goals most important to you.
