4 Benefits of a Money Market Account

4 Benefits of a Money Market Account: While checking and savings accounts are necessary for day-to-day banking, you might be seeking financial products that can do more to help grow your savings while still providing easy access to your funds. If so, definitely consider the benefits of money market accounts as part of your overall financial strategy.

Imagine a kind of savings vehicle with the potential to out-earn the interest found with traditional savings accounts. While there are similarities between these two accounts, there are also important differences. The amount required to open money market accounts, for example, is usually higher than a typical savings account. Benefits of a Money Market Account

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4 Benefits of a Money Market Account

Below highlights several benefits of money market accounts that can make them a superior option if you are looking for a safe place to park your funds:

1. It May Be Insured and Secured Benefits of a Money Market Account
   • Unlike money invested in stocks and bonds or other investment vehicles, the funds in a money market account carry lower risk. If you open a money market account with an institution insured by the FDIC, you can rest easy knowing that if the institution fails, you will be protected by FDIC insurance to the maximum allowed by law. A money market account is a safe way to get decent returns.
2. It Comes with Familiar Account Benefits
   • The benefits of money market accounts may include account perks you receive on the familiar checking or savings account, like access via checks, debit cards, ATMs and online banking. Benefits of a Money Market Account
   • For example of a benefit of a money market account, when buying or selling big-ticket items such as a car or house, the seller usually has to pay taxes on profits from the transaction. To ease this potentially painful encounter with the tax man, the seller can proactively estimate any capital gains taxes on the sale, and place that amount in a money market account where it will earn interest. With this method, you can simply write a check when tax time comes.
3. It Is Usually Easy To Access
   • With no maturity date, liquidity is one of the main benefits of a money market account. This comes in handy if you want to set up an account that earns interest and where the cash is accessed easily, like an emergency fund, or, if you’re lucky, a splurge fund. The advantages of money market accounts make a difference when you need to tap into your funds to pay for that unexpected auto repair or a spontaneous weekend getaway. In these instances, you can typically write a check, withdraw from an ATM or transfer money online. It’s important to know that all money market accounts come with transaction limitations, though, so check in with your financial institution to make sure you understand your monthly limits.
4. It Could Return Superior Interest Rates
   • One of the advantages of money market accounts is your ability to earn more interest than you would on a checking account, Becker says.
   • Despite the fact that most yields are currently small, Denney anticipates they will grow because the Federal Reserve is expected to continue to raise interest rates. He believes there may be three or four hikes in 2017 of about 0.25 percent.
   • “So, for the money market accounts that are specifically tied toward short-term interest rates,” he says, “as the Fed raises rates, money market yields will rise.”

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Author’s Verdict

The return on money market accounts may not generate a return as great as the stock market, but it does generate a better return than your traditional savings account and bears less risk than the stock market. If you’re curious of the benefits of money market accounts, hopefully this 4 Benefits of a Money Market Account post helped you! Let us know if it did in the comment section below or help add onto our list! Let us know about your thoughts and experience with Discover Bank Online in the comment section below! If you’re interested in more info regarding Discover Bank Online offers, check out our full listing of Discover Bank Online Bank Deals, Offers, Bonuses, and Promotions. Be sure to check back on BankDealGuy for more bank deals! How Do I Dispute A Transaction FAQs 

• Available nationwide online • Earn high yields with flexible access to your cash. • Earn 3.65% APY balances $100,000 and over • Earn 3.60% APY balances under $100,000 • No hidden fees. No surprises. • Easy cash access via debit or check, or via ATM at over 60,000 no-fee ATMs • Get started and open a Discover Money Market Account in 3 easy steps. Apply Now at Discover