Top Rated Money Market Accounts: Understanding How MMAs Work and Which Bank to Choose From

A “money market account”, or MMA, is a low-risk savings solution offered by credit unions and banks. Unlike with personal savings accounts, banks can actually invest the money from MMAs in other places such as bonds and CDs. The places they invest in are very low-risk, making the investment from the customers purchasing the MMA very low-risk itself. Investing in the top rated money market accounts is worthwhile since you will receive a better interest rate than you typically would with a savings account.

People open such an account for a variety of reasons, with the most common being because they wish to build an emergency fund. It’s a good choice for those who want low-risk savings and only need moderate access to their cash. The minimum requirement to open the account can be as low as $100, depending on the bank. Online banks can offer more flexibility than a traditional bank. With the top rated money market accounts, the customer will benefit from the bank’s high interest rates. Look for a high yield deposit account with a reasonable minimum deposit.

It’s important not to mix up money market accounts with money market funds. The latter is a type of investment with a fluctuating rate of return and is not FDIC-insured. An MMA, on the other hand, DOES have FDIC protection. An MMA also has its pros compared to a CD or other long-term investment, as it allows withdrawals, although there is usually a limit of how many pre-authorized withdrawals and transfers per statement cycle.

Top Rated Money Market Accounts Fees

Do research on various online banks to see what kinds of fees are associated with MMA accounts. The best banks are the ones that do not charge any fees for opening an account or for monthly services.

An MMA account is a great way to get started with investing. You won’t have to worry about managing the daily moves. The bank will take care of everything for you – all you have to do is sit back and let the money grow. The returns probably won’t be as high as if you were successfully investing on your own, but if you don’t have much experience with investing anyway, this is a better option, as it is safe and secure. Money market accounts still offer better interest rates than regular savings accounts.

Top Savings Accounts: A Guide to Online Banks and the Best Savings Opportunities

There is no need to start a savings account with a traditional bank. There are many online banks that offer better savings options for people of all ages. Regardless of your goal, you should consider signing up for one of the top savings accounts online. Some of these banks will do more than just allow you to save your money – they will help you get an interest rate on your money and help you “build” your account.

Online banks don’t have to concern themselves with maintaining branches and physical buildings all across the country. Because of this, they can better afford to offer high-yield rates. Some of them even pay upwards of 2% APY, when the national average is usually no more than 0.1%. Some savings accounts are easier to open than others. If you don’t have much money to start with, look for a bank that allows new accounts with as little as $100.

The reason why people are interested in the top savings accounts is because they want their money to grow but aren’t confident in their ability to invest in other ways, such as putting money in the stock market. Having an account with a leading, financially stable bank is a long-term, yet safe investment. You won’t get rich anytime soon, but you won’t have to worry about losing money either. It will grow slowly over time. If you are able to put more money in every month, you’ll be rewarded with an even higher APY.

FDIC Verification for Top Savings Accounts

Never trust any bank until you are able to verify that it is insured by the FDIC. The Federal Deposit Insurance Corporation is an independent agency created to maintain stability in the country’s banking system. Your money in an FDIC-backed bank will ensure the security of the investment.

The process of starting an online savings account should be easy. Typically, you’ll be expected to provide your SS #, valid state ID, the bank routing / account numbers from the bank account you’ll be using to fund the new savings account, and the details of any joint account holders or beneficiaries (if there are any). Most people these days choose to fund their accounts via electronic fund transfer, but some online banks still allow customers to wire the money or send in checks the old fashioned way. Find out if withdrawals and transfers are subject to limitations, and if so, how many per month.

Habits and Your Financial Health

There is a saying “you are what you eat”. There is another saying that is equally as important – “you are a product of your habits”. Using an analogy of an ocean liner – how would you steer it to change course in a meaningful way? Very slowly but consistently. If you can envision an ocean liner, you would turn the heading ever so slightly – fractions of a degree toward the direction you want to go. Someone watching the ship would not even realize that anything had happened. As time passes on, the effect of the small change in direction compounds and becomes larger and larger. By the time you reach your destination, you may be hundreds or thousands of miles from the original navigation. If you tried to steer that ocean liner all at once, would you succeed? You would likely overdo it and cause an accident, or get so far off course that you would lose time correcting the direction again.

What does this have to do with money and habits? Everything. If you have a goal of making or saving more money and get a ton of great ideas, and then try to implement them all at once, what would likely happen? Failure! None of the multitude of changes that you tried to do would stick and there would be no effect. What about going to a semi-nar and picking one change that you can make easily, and you make this change for a long period of time? You would likely be more successful. This is one of the secrets of changing money habits and letting time do its magic. If you make a change that is hardly perceptible (i.e. painless), then this method will hardly be a strain.

What are some examples of this? Have you heard of the latte factor? The latte factor is making one incremental change per day – not purchasing that cup of coffee and saving the money. Due to the frequency of how many cups of coffee someone would buy over years of their lifetime, this would add up to meaningful savings. Another version is instead of buying a latte, you buy a regular coffee and add your milk or cream to it. This would save you $2 per day as an example. After 365 days, you have saved over $700 per year from this one incremental habit change. The ocean liner analogy shows the effect of compounding the change to make it even larger. What would you do with the $700? Let’s say you invested it over 10 years. On top of the $700 x 10 years of contributions, you are also making a return on this investment. As a wild guess, let’s say you made $3500 in return over the 10 years – about 5% per year on average. Now the effect is compounded. You can then take this money and deposit it into an RRSP and get a tax refund which would amplify the effect a while longer.

The latte factor has been beaten to death in many blogs and financial circles. The point of the latte factor is an example of one small habit that can lead to large changes over a long period of time if applied consistently. There are many other habits that can achieve this result. How about saving $1 per day on buying bananas from your local grocery store? How about negotiating a slightly better rate on your cell phone plan? How about purchasing the basic gym membership instead of the deluxe one that includes less but would suit your needs exactly? How about wasting slightly less food each day and buying a little bit less? Maybe keeping the computer, cell phone or cars that you drive one year longer than you used to? Ask yourself what the trade-off may be in doing these things – but if there really isn’t anything lost then you have found a habit that will create more money.