Understanding Money Market Accounts: A Beginners Guide
Aside from a standard savings or checking account, more deposit options are available. WSB offers accounts that are safe and dependable, yet money market accounts can provide better returns with less risk. For more information on low-risk savings and short-term investment options on money market accounts (MMAs), continue reading below.
What Are Money Market Accounts?
A money market account (MMA) is an account provided by a bank or other financial entities that earn interest. These accounts offer higher returns than standard savings or checking accounts, making them attractive investments. They allow you to write checks, use debit cards, and are insured by the FDIC. This makes them safe and good for short-term or long-term investing where you have peace of mind to have the funds readily available.
MMAs are like savings where they earn interest; like CDs and/or Bonds, they are a safe and low-risk investment. MMAs generally pay a higher interest rate and can boost your returns by investing differently from regular savings accounts. They are vital to a diverse financial portfolio.
An MMA and a high-yield savings account are different. Both accounts have similar interest rates, but MMAs offer more features like check writing and debit card access. Understanding the distinction between the two is essential for anyone looking to maximize their money market accounts.
When Should You Open a Money Market Account?
MMAs have higher interest rates than regular checking or savings accounts, and people commonly use them for short-term savings. Investors generally do not use them for long-term investments like retirement. However, they serve as excellent vehicles for safe investments over shorter periods.
Consider opening an MMA before a significant purchase, like a vacation or wedding. These accounts are safe and easy to access, making them a good option for short-term expenses. Another reason people open an MMA is to create an emergency fund that earns interest. This account is different from your checking or savings account. You can use it for emergencies such as car repairs or medical bills. It is a separate account, but it can still be helpful in times of need.
Open a Money Market Account at WSB
Waldo State Bank has reasonable rates on money market accounts to help local customers reach their financial goals. We are proud to provide this safe investment option.
To open a personal money market account with WSB, you must deposit a minimum of $2,500.00. To avoid a $5 monthly fee, keep $2,500 in your account daily. This account has different interest-earning tiers, the higher your account balance, the higher your interest rate. The interest rate accrued daily is based on the daily balance you have in the account and calculated on the tier your balance falls into.
You can view our current rates for money market accounts here, though rates are subject to change. Opening an MMA at Waldo State Bank is a good choice for people who want to add safe investments to their portfolio to achieve their financial goals. Contact the Waldo State Bank team today for assistance with starting your journey into money market investments.
