Are you looking to open a new bank account? A money market account (MMA) — sometimes called a money market deposit account (MMDA) — could be the right pick for you. It comes with three incredible benefits that you’ll want to take advantage of.
1. Higher Interest Rate
A money market account comes with a higher interest rate than a standard savings account, which can give your balance a little extra help when it comes to passive growth. The annual percentage yield of this type of account is usually between 2-4% — around the same as a high-yield savings account.
2. Multiple Payment Options
An MMA gives accountholders more ways to make payments than a standard savings account. This is because an MMA is a blend of a checking account and a savings account, giving you access to a debit card and a checkbook. So, you can use your account balance to cover expenses via the following methods:
- Cash withdrawals
- Digital transfers through money transfer apps
- Debit card transactions
- Written checks
3. Accessibility
Much like a regular savings account, your funds in an MMA are easily accessible. They’re not locked away. You don’t have to jump through any hoops to make a withdrawal or a transfer — you’re free to use your savings the moment that you need them.
This quality makes an MMA an ideal place to store your emergency fund. With an emergency fund in an MMA, you’ll know that you can quickly access your savings to handle an urgent expense whenever it crops up. You don’t have to worry about waiting a long time to use your funds — you can make a payment immediately.
There are certain savings accounts that can’t provide you with this same level of accessibility. For example, a certificate of deposit (CD) will lock away your savings until the account has fully matured. Depending on the term you chose when you opened the account, this could mean that your savings are locked away for a few months, a few years or even a decade. If you try to make an early withdrawal, you will face an early withdrawal penalty — which could leave you with less than you started with.
Some people make the mistake of treating investments, like stocks and cryptocurrency, as a means to pay for emergencies. Even if these investments have gained enough value to cover an urgent expense, it will still take time to cash them out and access the funds to resolve your emergency.
What Can You Do If Your Savings Aren’t Accessible?
If you made the mistake of putting your savings in an inaccessible account, and you need to cover an emergency expense, you don’t have to panic. There are other means of covering an urgent expense. You could charge the expense to one of your credit cards and tackle the balance afterward. Or you could go to a website like CreditFresh and see whether you’re fully qualified to apply for a personal line of credit loan. As long as you meet all of the qualifications, you can take some time to fill out an online loan application and submit it. It shouldn’t take too long. You can complete this task in under ten minutes.
With an approved personal line of credit, you can request a withdrawal within your credit limit. That withdrawal can get deposited into your bank account, which would allow you to pay off your urgent expense as soon as possible. Once the ordeal is over, you can focus on repayment. All you have to do is follow a monthly billing cycle to repay what you borrowed and replenish your line of credit.
Are these benefits just what you need in a bank account? Then, you might want to look into an MMA as soon as possible. You’ll get to reap these benefits and more.