All about Money Market Accounts

There are many options to grow your savings, and it can be hard to know what the right option is for you. Money market accounts are one option that may offer higher annual yields over traditional savings accounts. But what is a money market account? Don’t worry, GO Federal Credit Union has got you covered.

Money market accounts

Money market accounts are set up similarly to traditional savings or checking accounts using a typical deposit and interest gained system with the ability to write limited checks. These types of accounts are like a savings or checking account hybrid.Although users tend to earn higher interest there are some pros and cons.

Money market pros

·         Access: easily access your funds by writing a limited number of checks per month or withdrawing cash.

·         Earnings: Money market accounts usually have higher interest rates than savings accounts and they’re insured just like the checking and savings accounts offered by your credit union in Dallas.

Money market cons

·         Limited withdrawals: most accounts limit how many times you can make a withdrawal in a month.

·         Minimum balance: these accounts have a higher minimum balance that has to be maintained.

Money market accounts, savings accounts and CDs

As stated above, money market accounts can yield a higher interest rate than most savings accounts. They do have high minimum deposits in general, which can limit accessibility to some members. The same withdrawal limits tend to apply to both.

CD accounts (certificate of deposit) are time-centered, needing between six months and five years to mature. CDs, though typically earning a higher interest rate than money market accounts, don’t allow for electronic transfers and most penalize you for early withdrawal. But, CDs have fixed interest rates which tend to be higher than other accounts.

With so many options, the most important factors are how much money you have to deposit, how frequently you may need to access it, and what kind of interest rate you are looking for.

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