June 14, 2021Benefits of a Money Market Account
Be honest. Like most people, you might have dreamed of winning the lottery, right? Sure, it’s probably not going to happen, but it’s fun to imagine all the things you could do with that lump sum payment...
Now whether you buy a ticket every now and then, it’s up to you. No judgment here. But there are some smarter ways to plan for your future.
Any responsible financial advisor will tell you that a savings plan is vital to your financial health and long-term security. Whatever your age, income, or financial goals, you should start growing your savings now. Putting aside a little cash for “a rainy day” is not just a good idea for the short-term but also a lifelong good habit. Even if you’re still in school, you can make room in your budget to build that rainy day fund.
Now, what’s the best “piggy bank“ for you?
Types of Accounts
Although most of your transactions can be done online, and “plastic” is more common than cash, you should stash your cash in a separate savings account, preferably one that you can just forget about unless you are adding money to it.
Common savings accounts are easy to open but aren’t as easy to “raid” as the hiding place under your mattress. Still, today’s interest rates can be discouragingly low. Other insured financial options include PEFCU share certificates, often known as Certificates of Deposit (CDs). Share certificates are issued for terms that can range from six months to five years. CDs have a place in your overall financial plan, but what about money market accounts?
Overview of Money Market Accounts
A PEFCU money market account is basically a hybrid, interest-bearing checking account. It’s between a common, low-interest savings account that gives you full access to your funds when needed and a high-yield CD that limits access to your funds for a set term.
Money market accounts offer a variety of options, but they usually have the following requirements:
- A minimum opening deposit
- Maintenance of a minimum balance to earn interest
Because they offer some of the advantages of both checking and savings accounts, money market accounts are a secure way to earn higher returns on your money with the advantage of easily withdrawing your funds if necessary. Having a “cushion” of available funds benefits a member who can withstand the temptation to “borrow” those funds for impulse purchases.
We’re Here to Help!
Responsible money management and financial planning are all about saving. It’s the actual act of saving that is most important. Once you have established good savings habits, start exploring different accounts to help meet your financial needs.
If you have questions about money market accounts or want to open an account, stop by or give us a call at 1-800-266-6673.
Each individual’s financial situation is unique, and readers are encouraged to contact PEFCU when seeking financial advice on the products and services discussed. This article is for educational purposes only; It does not constitute legal advice. If such advice or a legal opinion is required, please consult with competent local counsel.