Money market account: a good way to save today
Safe, secure, and conservative, money market accounts (MMAs) are proving to be an investment bright spot that can help you save more confidently in today’s volatile economy.
“With a sinking and volatile stock market, you’re seeing many consumers flock to money market deposit accounts,” says David Barr, a spokesman for the Federal Deposit Insurance Corp. in Washington, DC. This is largely due to FDIC insurance currently covering up to $250,000 of assets per person, per bank, per deposit category. That’s a protection not generally available to holders of stocks, bonds, or money market mutual funds.
In general, MMAs resemble a standard bank account, although many have a monthly or quarterly restriction as to how many times you can make a withdrawal or deposit. However, MMAs do not have a maturity date similar to a certificate of deposit. When linked to a checking account at your current bank, an MMA can earn more interest on funds that would normally sit in low- or no-interest checking accounts.
An MMA can be extremely attractive to consumers as a simple and secure way to invest your funds.
“So you have a product that offers a higher interest rate than a savings account but more flexibility than a CD,” Barr says.
While some consumers may be driven to the best rates an MMA offers, others may be interested in convenience, such as a variety of withdrawal methods and live customer service. Barr also advises to look for fees that may be attached to a money market deposit account.
For information about AAA’s Deposit Program, call (888) 728-3151 or go online to AAA.com/deposits.