Money market accounts (MMAs) are unique types of savings accounts that offer numerous benefits. An MMA combines the best of both worlds of a checking account and a savings account, making it an excellent choice for savers and consumers alike.
From higher interest rates to increased liquidity and enhanced safety, MMAs can help those seeking to maximize their savings potential without sacrificing accessibility. Understanding their ins and outs can help you make more informed decisions and optimize your financial strategy.
Read on to learn more about money market account benefits and how they can contribute to your overall financial well-being.
SAFETY
One of the foremost benefits of MMAs is the safety they offer. Similar to savings accounts, they are covered at credit unions by the National Credit Union Administration (NCUA) for up to $250,000 per depositor per institution.
This protective measure provides a cushion of security for your hard-earned money, safeguarding your funds from market volatility or the unlikely event of an institutional failure. You’ll get peace of mind, knowing that your savings are well-protected while they are growing.
HIGHER INTEREST RATES
Money market accounts generally offer higher interest rates than standard savings or checking accounts. This is mainly due to how they work—banks and credit unions use the deposited funds to invest in stable, short-term, low-risk securities. The returns from these investments are then passed onto the account holders in the form of interest.
EASY ACCESS TO FUNDS
While subject to federal limitations on certain withdrawals and transfers, you’ll get relatively easy access to your funds. This makes MMAs a flexible option for individuals who want a combination of growth and liquidity in their savings strategy.
EASY TO OPEN
Opening a money market account with a Utah credit union like Wasatch Peaks is a straightforward process. As community-focused institutions that pride themselves on their member-friendly approach, credit unions make setting up an account easy, typically requiring just an application form and an initial deposit.
Credit union staff are always ready to assist, guiding members through every step of the account-opening journey to ensure a hassle-free experience.
HIGHER BALANCE, HIGHER DIVIDENDS
Another significant benefit is that MMAs often employ tiered interest rates, so the higher your balance, the higher the dividends you are paid. This tiered structure means that your money works harder for you—the more you save, the more you earn, which creates a cycle of financial growth that benefits your overall savings strategy.
OPPORTUNITY TO COMPOUND DIVIDENDS
Many MMAs also allow the compounding of dividends, which can substantially boost your total returns over time. This means the interest earned on your account gets added to your original investment, which then makes even more interest. Over time, the power of compounding can significantly increase your savings.
ADDITIONAL BENEFITS OF MONEY MARKET ACCOUNTS
On top of the above-listed benefits, MMAs come with even more perks. For instance, if you open an account with Wasatch Peaks, you gain access to a suite of other financial products and services, such as personal loans and credit cards, often at better rates than traditional banks.
Moreover, we’re known for our local, personalized customer service. We operate on a membership basis, which means you're not just a customer—you're also a member-owner. This unique structure creates an environment where your needs are understood and prioritized.
DIVERSIFY YOUR SAVINGS
MMAs are an excellent method for diversifying your savings strategy. By incorporating a money market account into your broader financial plan, you can reap the rewards of higher interest rates and safety while maintaining access to your funds.
WHY MONEY MARKET ACCOUNT STAND OUT
With the array of savings options available, you might wonder why MMAs stand out. The reason is that they provide a happy middle ground for savers by bridging the gap between regular savings accounts (low risk and low returns) and riskier investments such as stocks and bonds (high risk, high returns).
FLEXIBILITY AND VERSATILITY
Another feature worth highlighting is that they're suitable for various savings goals, whether you're building an emergency fund, saving for a down payment on a house, or setting aside money for a large future purchase. The easy access to your funds combined with the potential for higher returns can be a significant advantage depending on your financial goals.
ENHANCED FINANCIAL MANAGEMENT
Opening a money market account can be an integral part of your overall financial management strategy. The tiered interest rates can motivate you to keep more funds in the bank, promoting better money management.
COMMUNITY IMPACT
When you open an account with Wasatch Peaks, you're also making a positive impact on your local community. We’re a nonprofit institution that reinvests our profits back into the community through various programs, projects, and services. As a member, you're contributing to this cycle of mutual support.
SECURE YOUR FUTURE WITH A WASATCH PEAKS MONEY MARKET ACCOUNT
Money market accounts offer a unique blend of benefits not found in other types of deposit accounts. Their safety, higher interest rates, and relative liquidity make them a compelling choice for those looking to maximize the potential of their savings.
At Wasatch Peaks, we help our members save for the future with several attractive savings products. Click below to learn more about CDs compared to money market accounts to determine which one is right for you.
