Why Your Savings Account Is Costing You Money And How To Fix It Fast

A money market account or MMA is a non-financial account, offered by banks and other financial institutions. It’s also known as a money market deposit account (MMDA). It pays interest based on current money market rates.

Why choose a money market account

An MMA requires a higher deposit, but also has a higher level of interest than a typical savings account. It has the reassurance of being FDIC-insured.

Consider if it works for you

An MMA is a midpoint between the high risk and high yield of an investment, and the safety (but associated low interest rate) of a savings account. It also escapes the commitment required for a CD (certificate of deposit), as you don’t have to wait for a maturity date before getting hold of your money again. Though it’s not a savings account, the rules for a money market account are similar, with only limited withdrawals allowed per month. The interest earned is taxable also. You may want to consider money market mutual funds, if you want to have shares rather than an account.

Do your research

Though it’s rare, some MMAs have such flexibility they could almost pass for checking accounts, as long as you don’t need to make lots of transactions. This way you can benefit from a higher interest rate while still having access to your money. If this won’t work for you, it’s also worth checking for accounts offering special introductory rates, especially online. Look around and you could find a great rate.