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get the right Money market account for you
When it comes to money market accounts, it can be easy to overlook some very basic information about them. They share a lot of features with standard savings and checking accounts, for example. They pay higher interest rates and, typically, require a higher initial deposit. Minimum balances factor into them, as well. Still, even with all of that, the real question is and always will be “What’s the best account for my needs?” Luckily for you, you’ve got more than a few great options available to you. Join us, today, as we break down what to look for as well as some of our top picks for better money market rates to help you save money.
BMO Harris: 1.65% APY
Chicago-based digital bankers, BMO Harris, has nearly 600 branches in states across the country. That said, Florida is the only state eligible for platinum money market accounts, so this applies to them only. Request checks for your platinum money market account, and you’ll easily be able to use this investment when you need to. To this end, you can also get an ATM card, putting your money squarely in your hands. The account itself has zero monthly maintenance fees and no need to maintain a minimum balance of any sort. All great, right? Well, there are some things to look out for.
For balances under $ 5,000, you’ll only earn a 0.01% APY. Go below that amount, and it would be more beneficial to invest in an account with a lower minimum balance. If the goal is to get a competitive APY (which it is), this number should be make-or-break for you. There is also a $50 fee to close out your account within 90 days of opening it, which makes sense given that it’s a platinum account. This just means you’ll want to consider your account carefully before purchasing it.
UFB Direct: 1.70% APY
The bank itself accepts deposits under Axos Bank (of which it is a subdivision)’s FDIC certificate. Like other online banks, UFB presents a saving in that it doesn’t carry the standard costs that come with physical institutions. As a result, it can offer some of the most consistently-high rates on all of their products. Their money market account, in particular, presents a competitive option, not only in terms of APY, but performance as well. UFB’s MMA combines high-performance money market performance with a convenient checking account. With this in mind, account holders can write a limited number of checks every month, adding to the account’s overall versatility.
With an account like this, one of the biggest advantages comes in the form of its mobile baking readiness. Users can manage their money income, deposit checks, and access financial management tools via UFB’s mobile tools. But, as with most banking institutions, there are things to watch out for with UFB Direct. Firstly, balances of less than $25,000 will only earn 0.5% APY, while UFB itself requires a heft $5,000 minimum account-opening deposit. You’re also going to requires a minimum $5,000 balance to prevent a $10 monthly maintenance fee. Can’t meet the minimum requirement? Then you’ll want to compare this account with other banks or credit unions for best results. As a final note, make sure that you don’t keep too much money in various Axos Bank brands, such as this one. These various deposit accounts are all insured under the same FDIC certificate, so you might exceed their guidelines.
CIT Bank: 1.55% APY
A subsidiary of CIT Group Inc, this bank’s money market account comes with two different savings accounts options. The MMA offers a very reasonable minimum balance of $100 to open the account itself. There are also no associated service fees, meaning your earnings from interest don’t suffer. CIT also offers multiple types of bank account, which is a bonus when compared to other online banks where your choice may be more restricted.
Keep in mind, the tradeoff with the MMAs from CIT Bank is their relatively high transaction fees, amounting to $10. This is mitigated somewhat by a $50 cap, per month, but there is also a $30 stop payment fee as well as an overdraft fee of $25.
Investors eAccess: 1.35% APY
Founded in 1926, Investors eAccess bases its operations out of New Jersey, with more than 150 branches across both Jersey and New York. Not only that, but their eAccess Money Market is available across all US states, so customers can benefit from its highly competitive APY. When it comes to balances under $ 2 million, the Investor’s eAccess Money Market APY works very well, with no limit to how many accounts you can open. It comes as a personal account, with no hidden fees and no minimum balance required to avoid fees, either.
Investors Bank also offers an Investors Mobile application, through which users can deposit up to $ 3,000 per day, per user, with a daily account cap at $6,000. The app is also an excellent way for users to get the customer service they need, with Investors Bank offering service by phone, throughout the week. On the flip side, the eAccess MMA offers no checking privileges. It also doesn’t offer a debit card, making it the first on our list to limit withdrawal options like this. There is no ATM access or even the option to send outgoing bank transfers. You can make conduct up to six withdrawals, per month, with Online Banking. These are limited to less than $250,000, per month. US citizens and permanent residents living outside of New Jersey and New York are eligible for these MMAs.
TIAA Bank: 1.40% Intro APY
With TIAA Bank, users have access to a fantastic range of options, from banking and loans to various investment options. High yield money market accounts at 1.40% APY give users various advantages, not least of which is a “Performance Commitment”. This holds that your performance commitment rate will remain competitive. It’s also a guarantee that it will remain within the top 5%. MMAs also carries the benefit of zero monthly fees, which allows for relatively seamless mobile check deposits. It’s also IRA eligible, which adds to its versatility. Keep a minimum of $5,000 in your account at all times, and TIAA will refund any ATM fees incurred from using other banks. Regardless of your balance above the requisite $5,000, the bank will reimburse you up to $15 for non-TIAA ATM fees.
There are some considerations to make. The 1.40% introductory APY on your account is a great number, but there’s a good chance it may drop after a year, based on your balance at the time. This is what’s known as an introductory APY, and should factor into your decision making.
Sallie Mae: 1.15% APY
When it comes to standard consumer loans, Sallie Mae isn’t the first name that comes to mind. After all, they’re famously associated with student loans. But did you know they also provide a range of savings products intended for consumers? Their bank offers its money market account, with extremely competitive rates. Their returns are also often rated among the highest in the United States, a factor many people associate with their online banking. The low overhead costs of the account also allow the bank to return those savings to their customers through improved rates. More returns make this MMA a fantastic option for putting away savings and earning interest off of them while you wait.
Add to all this the fact that Sallie Mae’s MMA requires no minimum balance to maintain or monthly fees to use. Users can also write checks and manage their accounts from the comfort of their home computers or smart devices at any time they want. Before we close out on Sallie Mae, consider a few important things. This is completely online with no physical branches. You can also write checks MMA, but you will be limited to six transactions, total, from month-to-month. Sallie Mae also will not offer to check accounts, largely limiting your liquidity if that is a concern.
Money Market Accounts
A money market account can be a huge asset just for its Annual Percentage Yield (APY) alone. Depending on where you do your banking, some accounts may come with a limited number of checks to write, every month. Others may offer a debit or bank card. Choosing an MMA from one of the dozens of providers out there can be a great way to lock down one of these high-yield APYs. This is why many online banks have come out with great competitive accounts in recent years, to compete with brick-and-mortar. All of which adds up to great deals for you, the consumer, provided you know where to shop.
Looking for more great tips and insights on working better with your money? Check out the rest of our personal finance blog!
Frequently Asked Questions
Learn the money market account basics
What is a money market account?
The term “money market account” refers to savings accounts that pay interest based on deposits. They allow withdrawals based on a few choice restrictions. These accounts, also known as MMAs, can be found at banks and credit unions across the country and are used for both short and long-term savings.
Consider them useful for some of the following:
- saving for an emergency
- saving for a large purchase
- money that will be invested in stocks and bonds
An MMA shares various features with traditional checking and savings accounts. What sets them apart, historically, is that money market interest rates are higher. They’ll also require higher initial deposits, in addition to calling for higher minimum balances. Finally, while you can withdraw from these accounts, there will almost always be limits to the types of withdrawals and transfers. You’ll also find a stop on how many you can do.
As an alternative, you may consider a Certificate of Deposit, or CD, as they do tend to pay higher rates than checking or savings accounts, as well. The downside, however, comes from the very thing so many people like about MMAs: the withdrawal issue. CDs are term deposits, with users incurring penalties if they choose to withdraw funds before the end of the term.
MMAs also don’t have term options. Where a CD’s term may vary from as little as one month to as many as ten years; with an MMA, this isn’t a factor.
It’s also important not to get money market accounts confused with money market funds. MMAs are banking, specifically. Money market funds are investment-related, the type of mutual fund that deals in cash, and various cash equivalents. This confusion is a big part of why money market accounts are often referred to as money market savings or deposit accounts. The distinction is designed to illuminate what the account is used for: banking, not investments.
How safe are money market accounts?
To put it simply: MMAs are safe when it comes to saving your money. They’re considered one of the best options around for holding money, in terms of safety, for some of the following reasons:
- They are deposit accounts, which are safer
- Investments can involve both gains and losses
- Deposits, on the other hand, only receive interest
- You’re never running any risk of loss
An MMA account, typically, will be insured by either the Federal Deposit Insurance Corp. or the National Credit Union Administration. This is a safety measure put in place to protect the person depositing if the bank or credit union ever fails. This insurance, as a standard, amounts to around $250,000 per instance. Instances account for each user, institution, and account ownership category. Deposit insurance is one of the big ways in which MMAs and money market investment funds differ from each other. There’s an inherent risk when making any investment, making it impossible to protect with insurance. Therefore, money market investment funds never are.
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