A money market savings account is an excellent place to deposit your extra money. It will pay you a better interest rate than a typical savings account and it allows you to access you money by check.
While writing checks is not as popular as it once was with the advent of check cards and electronic banking, this feature is still important as many will use their money market savings account to make large purchases. Examples of these purchases would be appliances, automobile tires, home maintenance, taxes and others.
A money market savings account provides flexibility in accessing your funds. These accounts are available via internet banking, over the counter at the bank’s branches and by check. The access to these accounts is limited to 6 withdrawals a month. Since a money market savings account is meant to house excess funds, the limitation of 6 withdrawals should not pose a problem for most depositors. What you get in return is a higher rate than you can earn on a checking account which allows you unlimited withdrawals per month.
Market Savings Account Gives Better Interest
As you consider where to place your funds, consider also the structure of a money market savings account. Most of these accounts pay interest on a tiered basis. This is important to know as this will reward you for higher balances. With this in mind and the fact that you can make up to six withdrawals per month, you will want to place as much of your funds into a money market savings account as you can. If you run short in your checking account, you can always move some money from your money market savings account. Many financial institutions will even allow you to connect your money market savings account to your checking account to make a transfer automatically if you need additional funds in your checking account to clear a withdrawal. This of course has to be limited to the six withdrawals per month. This withdrawal requirement is due to regulatory rules and not a limit that the banks place on a money market savings account.
As you consider how to manage your money, be sure and consider a money market savings account. It will give you an option that may earn you a higher interest rate while still allowing you to access your funds. This access may be important to you and be the reason you may prefer a money market savings account over a higher paying certificate of deposit. In any event, do your research and find the best yield so that you can maximize your earnings.