Money market accounts are a popular choice among bank customers. These accounts are for those who prefer having the freedom to make transactions using savings but with checking capabilities.
While a Money Market account has transaction limitations like a basic savings account, it offers advantages. For example, high-interest bearing rates, an ATM card for unlimited cash withdrawals, and easy fund transfers between linked accounts at the same bank. You can also transfer funds to an external online financial institution.
How a Money Market Account Compares to Other Savings Options
One of the most beneficial privileges of a Money Market account is liquid cash flow. This is convenient for account holders who need to withdraw substantial amounts of money immediately for any reason. This can regard rent payments, costly expenses, and daily necessities.
Other savings accounts like Certificates of Deposit (CDs) have penalties for needing your money. Unlike CDs, Money Market allows customers to make transactions at any time free of penalty fees for early withdrawals.
Several Long and Short-Term Money Market Account Benefits
While customers must follow withdrawal guidelines with a Money Market account, they still get the flexibility that other banks with strict account regulations refuse to offer. Consider the various benefits you can get after depositing money in one of the highest-interest-earning savings accounts. Especially one that maintains value despite the length of time you store your funds.
Convenient Fund Accessibility
If you prefer to withdraw money at your convenience, a Money Market account is the right savings choice because of its checking account capabilities. A few common transactions include mobile deposits, cash withdrawals via an ATM within a bank’s network, and ACH. Unfortunately, not all financial institutions offer all four methods, and some issue debit cards only if customers request them.
High-Yield Rates
Money market accounts can offer competitive rates compared to checking accounts and other savings accounts. Your funds can continue to grow if your APY is high, which can help you save money to use as supplemental income. APYs can go up and down depending on economic conditions and other factors, and they can vary significantly from bank to bank.
Savings Protection
Money Market savings accounts often have protective securities. Customers can trust that their money is safe from unauthorized transactions and other suspicious account activity. Since a Money Market account is FDIC-protected, your money remains secure even after a bank acquisition or shutdown.
Liquid Withdrawals
One of the most beneficial money market account capabilities is physical cash withdrawals, a feature that checking accounts offer. Since cash transactions are exempt from a transfer limit, you get money market funds at your convenience. Furthermore, you aren’t violating the Federal Reserve’s limitations and still earn interest on your cash balance. This can also benefit you if you have a business money market account.
Low-Risk Investment
Unlike stocks, a money market account is a low-risk savings vehicle to deposit funds. It also offers protections that high-risk investment options cannot provide account holders.
Another advantage is an account can earn interest if the balance remains above the minimum deposit amount. This maintains your funds without losing value, although many banks charge additional fees if account holders violate transactional guidelines.
Money Market accounts are ideal for short and long-term cash storage and easy access to funds when necessary. They provide high-security features that keep accounts secure as balances grow because of their competitive, high-interest rates.
If you prefer to use a savings account that provides checking advantages, consider opening a Money Market account to start managing your money.
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