While it may seem like choosing a savings account is a no-brainer, we strongly recommend taking a step back to analyze your options before making a choice. Why? Well, the fact of the matter is that not all savings accounts are the same.
A regular savings account is a low-interest account you can open with your local bank or credit union that gives you a safe, secure place to store your hard-earned money. A money market account, on the other hand, is like a regular interest-bearing savings account, but with a few added perks.
Let’s dive into the pros and cons of a money market account so you can determine if it’s the right choice for you.
The Pros of Money Market Accounts
One of the biggest advantages of money market accounts is that they often come with higher interest rates than regular savings accounts. This means you’ll earn more money by putting your funds in a money market account instead of a standard savings account. Many money market accounts also come with features like check-writing privileges, making them more flexible than regular savings accounts.
At RMLEFCU, our money market account comes with a ton of benefits:
Competitive, tiered dividends on balances of $2,000 or more paid monthly
Higher balances earn higher rates (currently 1.50% to 2.50% APY*)
No restrictions on withdrawals
Free digital banking
$2,000 minimum to open
The Cons of Money Market Accounts
Money market accounts usually require higher minimum deposits than regular savings accounts. At RMLEFCU, our regular savings account only requires members to deposit $5, whereas to open a money market account, members need to be able to put $2,000 into the account right off the bat. Additionally, depending on where you open your money market account, there may be limits on how many transactions you can make each statement cycle; if you exceed these limits, you could face additional fees or have your account closed altogether.
Level Up Your Savings Account Now
Whether or not a money market account is right for you depends largely on what kind of return on investment (ROI) you expect and how much risk you’re willing to take on with your savings. Money market accounts can be a great option for those looking for greater returns without taking huge risks with their funds. On the other hand, if you’re looking for a savings account with the least amount of risk possible, a standard savings account may be a better match for your situation.
If you’re still unsure what kind of savings account is right for your lifestyle and financial goals, reach out to our Certified Financial Counselors at (303) 458-6660. We would be more than happy to help you narrow down your options.
*Annual Percentage Yield. With approved credit. Some restrictions may apply. Rate subject to change.