Money market accounts (MMA) are an attractive option to consider if you’re seeking a savings product that earns interest, offers more withdrawal options and is insured as long as you’re within federal insurance limits and guidelines. To know if this type of account is right for you, consider these five benefits to opening a money market account.

1. Accessibility of funds

Money market accounts earn interest while also providing a degree of liquidity. Most MMAs provide check-writing and/or ATM card privileges for withdrawals, as well as the ability to transfer money between a checking or savings account. An MMA could be worth opening for consumers who want to grow their savings but still want to be able to access the funds with relative ease.

2. Potentially higher interest rates

Money market accounts traditionally pay higher interest rates than savings accounts (and much higher rates than checking accounts).

• The average MMA earns 0.23% APY, according to the FDIC.

• USSFCU MMA's earn APY's as high as 1.66%^*

3. Check writing

Writing checks from a money market account can be a useful feature, providing flexibility and liquidity that typically isn’t found with other types of savings products, such as savings accounts or CDs. Some money market accounts permit a maximum of six withdrawals or transfers each statement cycle, which includes checks. The six withdrawal limit comes from a former federal regulation; the regulation has been relaxed, but many institutions still impose the transaction limit.

4. Safety

Safety is built into money market accounts offered by Federal Deposit Insurance Corp. (FDIC) banks and National Credit Union Administration (NCUA) credit unions. Both organizations insure money market accounts for up to $250,000 per depositor, per insured bank or credit union and per ownership category. As long as your deposits are within these limits at a federally insured institution, you can rest assured that the money will be protected in the event of a bank or credit union failure.

5. ATM withdrawals

One of the most convenient features some money market accounts offer is access to an ATM card, just like many checking accounts. ATM withdrawals don’t count toward the six withdrawal or transfer limit per billing cycle, which means you can take money out whenever you need it without exceeding your monthly transaction limit. But remember: money market accounts are still primarily for saving, and it pays to let your savings grow.

Bottom line

Money market accounts are an attractive option to consider if you’re seeking a savings product that earns interest, offers more withdrawal options and is insured as long as you’re within federal insurance limits and guidelines.

Like all financial products, however, MMAs have their advantages and disadvantages and aren’t for everyone. Your financial goals can help determine whether a money market account is right for you. For example, if you need an account for daily expenses, a checking account is likely a better option. Or, if you don’t need access to your money for a specified period of time, a certificate of deposit will likely earn a higher rate of return.

It’s also important not to confuse money market accounts with money market funds, which are offered by brokerage firms and mutual fund companies, like Fidelity and Vanguard. Money market funds generally offer higher returns than money market accounts, but they carry slightly more risk since they are not insured by the FDIC or NCUA.

USSFCU Money Markets

Enjoy tiered interest rates that increase as your balance grows, no monthly service or set-up fees and no limit on the number of transactions you can make. Interest yields are high and opening your MMA online can be done in as little as ten minuites. Get started today!

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*APY=Annual Percentage Yield. Rates effective as of 02/01/2023. Rates are subject to change without notice. The minimum balance required to open a money market account is $2,000.00. You must maintain a minimum daily balance of $2,000.00 in your account each day to obtain the disclosed annual percentage yield. You will earn dividends for every day during the period that your account equals or exceeds the minimum daily balance requirement. The dividend period on your account begins from the date that your account is opened. Fees may reduce earnings, visit ussfcu.org/fees for more details. Membership eligibility required for all rates. Federally insured by NCUA.

Article is for informational purposes only. 5 reasons to get a money market account, 8 Aug. 2022, www.bankrate.com.