Grow your savings with the flexibility of a money market account!
Most people have heard the term “money market account,” but odds are that many don’t know what it actually means. The financial experts at Kansas City Credit Union can help members understand this product, how it works, and decide if it’s the right choice for them personally, or for their business, to get the most benefit from their hard-earned money.
What is a money market account?
A money market account is a secure, interest-earning account that offers easy access to funds.
In short, a money market account is a savings account and a checking account combined into one. And, money market accounts pay higher interest rates than regular savings accounts and offer more flexibility than certificates of deposit (CDs). Money markets offer limited accessibility but include the potential for increased earnings. Depending on how often the account holder needs cash, they can be a convenient and sensible option.
Withdrawals can be made through written checks or via a debit card linked to the account. Compared to a regular checking account, money market accounts may be a better option for earning interest on money than CDs. While CDs usually offer higher interest rates than money market accounts, they must remain untouched for a set period of time. Withdrawals from a CD during the set timeframe of the CD (if allowed) will incur penalties, which defeats the purpose of investing in CDs in the first place.
Money market accounts are ideal for people who want to:
- Earn more interest from their savings than they can with a traditional savings account.
- Maintain easy access to their money if they need it.
- Keep funds in a safe, insured account.
The Difference between a Money Market Account and a Money Market Fund
There can be some confusion around a money market account versus a money market fund, but the differences are simple – and significant. Money market accounts are low-risk, higher-earning savings options that are available only through credit unions and banks, and they are FDIC or NCUA-insured. Money market funds are financial products sold by investment firms, making them subject to volatility in the financial markets. Money market funds are investment products, not savings accounts, so they are riskier.
When is Opening a Money Market Account a Good Decision?
A money market account at KCCU is a safer place to grow savings, with higher interest rates. That makes these accounts ideal for:
- Saving for a large purchase.
- Emergency funds.
- Savers who are risk-averse.
Money Market Accounts for Business Owners
Money market accounts offer business owners higher returns on cash while keeping funds accessible.
Money market accounts are an excellent option for business owners who want to earn better returns on their cash balances while still maintaining access to their funds.
With better interest rates than standard business checking and savings accounts, a money market account can generate passive income with your reserve funds, emergency cash, or even tax set-asides. When a surprise expense arises, business owners can still access funds.
Many business owners also use money market accounts as a helpful budgeting tool. Earmarking funds for different business needs, such as payroll, taxes, or future growth, can be beneficial. And, designated money market accounts can be useful in tracking and maintaining cash flow.
Kansas City Credit Union Money Market Accounts
Opening a money market account at Kansas City Credit Union includes more than the benefits inherent to this form of saving money. Account holders at KCCU are much more than that. They are members of the community working with financial professionals who understand their needs on a more local and personal level.
The team at Kansas City Credit Union is happy to walk members through the benefits of opening a money market account, as well as other savings options to help them choose the right solution based on their specific needs. A money market account at Kansas City Credit Union can be the perfect solution for ready access to funds combined with longer-term financial growth that, taken altogether, provides security, confidence, and peace of mind—all in one place.
Contact Kansas City Credit Union to learn more about money market accounts and putting your money to work for you!
