First things first: What is a Money Market account? Similar to a traditional checking or savings account, a Money Market account generally offers a significantly higher earned interest rate, but with some restrictions such as a maximum number of transactions each month, or a minimum monthly balance. Just how much more interest can you earn? UFB Direct is currently offering a 3.83% APY money market account, compared to Chase Bank currently offering a paltry 0.01% APY on their savings accounts at the time of this writing according to NerdWallet. With a $30,000 balance, thats $1,149 interest on a Money Market account, compared to $30 in the Chase savings account.
So should you consider a Money Market account? If you have money sitting in a savings account that you don’t expect to need in the near future, they can be an excellent way to safely earn interest compared to simply letting the money sit in a Savings account. Most money market accounts still allow you an unlimited number of ATM withdraws each month, but can restrict you to a lower number of transactions (similar to a Debit card purchase) so it won’t replace your checking account or credit card.
Money Market rates change often, so be sure to research current rates, and make sure the one you choose is FDIC Insured!