Money market accounts are offered by banks and credit unions like regular savings accounts. They usually pay higher rates, require higher minimum balances and limit withdrawals. Many money market accounts will even let you write a limited number of checks each month.
This type of account gained a high profile during the high inflation of the 1970s and early 1980s. With the financial institutions acting as intermediaries, money market accounts allowed consumers to benefit from the high rates on short-term investments like Treasury bills and commercial paper. With inflation and short-term rates low for the last few years, these accounts have been less attractive to most consumers. However, now that stimulus packages and other government spending are on the rise, many people expect to see an increase in inflation, with a corresponding rise in short-term interest rates.
How safe is a money market account? Like a savings account, your money market account at the credit union is insured by the National Credit Union Administration.
Dividends on money market accounts are usually compounded daily and paid monthly. The rates paid can vary quite a bit from account to account and can often increase as the funds you have on deposit increase. Want to know our current rates? Just ask us!
Money market accounts allow you to withdraw your money whenever you want, but you are usually limited in the number of withdrawals you can conduct each month and the methods in which you are able to do so. There may be a fee if the balance in the account falls below a set amount or for withdrawals that are beyond the maximum that are allowed each month.
Wondering whether you should have your money in a savings or money market account? We’re happy to answer any questions, and let you know what’s best in your situation. Give us a call at 201-659-3900 or stop by any branch to find out more.