Money market accounts are frequently chosen by savers in order to receive a competitive interest that is equivalent to that of many regular savings accounts. Additionally, money market accounts could offer benefits like check-writing rights and debit cards. These readily accessible liquid deposit accounts are frequently provided by banks and credit unions, and they give you quick access to your money.
Setting up a money market account normally only involves a few easy steps, whether you choose to open one online or in person at a bank office.
Opening a money market account (step-by-step)
1. Shop around
Find a money market account with the highest annual percentage yield by comparing rates at several banks and credit unions to obtain the most return on your money (APY). Rates for these accounts are often variable, which means they can change in accordance with changes in the market, however some may offer stable rates for a limited time.
Consider any minimum starting deposit requirements and whether a minimum amount is required to avoid monthly service charges when selecting an account. Choose a bank or credit union that is insured by the Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Association, respectively (NCUA).
2. Gather the required documents
You must provide specific forms of paperwork whether you open a money market account online or in person at a branch. You must also enter the information of any joint owners if the account has any.
This information may include:
- Driver’s license or state ID
- Birth certificate
- Social Security number
- Phone number
- Proof of address, if your ID lists a previous address
Remember that you will need to temporarily lift any security-related credit freezes you may have in order to open the account.
3. Fund the account
Your options may include an online transfer or remote check deposit if you’re funding the account by electronically transferring money from another bank account. Have the account details for the bank you’re moving the money from on hand when making an internet transfer.
You can also deposit money with cash or a check when you open a money market account at a bank location.
4. Set up online banking
You should probably set up online banking if you’re opening a money market account with a bank you’ve never used before so you can conduct transactions using the bank’s mobile app or website. Checking your balance, ordering checks, depositing checks, transferring money across accounts, and more may be made simple as a result.
You can register by generating a username and password on the bank’s website or by downloading the mobile app. Use a strong password using a combination of random uppercase, lowercase, numbers, and symbols.
5. Set up direct deposit
To ensure that there is money available to pay expenses, many people prefer to have their paychecks directly deposited into a bank account. To move funds required for living expenses to your checking account, you can also set up direct deposit to go to your money market account. This can encourage you to save additional cash rather than squander it. A money market account will also likely yield interest on your money, but not all checking accounts do.
By providing your employer with the account number and routing number of the new account, you can begin direct deposit.
The greatest methods for picking a money market account
When looking for the finest money market account for you, like with any form of deposit account, there are a number of things to take into mind.
The APY for money market accounts can fluctuate greatly, much like it does for conventional savings accounts. Since they do not have the costs associated with maintaining branches, online banks typically offer greater rates than traditional brick-and-mortar banks. Some people might provide affordable prices to entice customers.
The FDIC or NCUA, both of which cover deposits up to $250,000 per customer, per bank, should be considered while selecting an account. This implies that in the event of a bank failure, you won’t lose your money.
The majority of banks and credit unions carry this insurance, and you can check if one does by utilizing the NCUA’s searchable database or the BankFind Suite from the FDIC.
Minimum balance requirements
You may find that many money market accounts have higher minimum balance requirements than conventional savings accounts when comparing different options. It could be required to maintain such a minimum amount in order to earn the quoted rate and keep monthly maintenance costs at bay.
Check-writing privileges and debit cards
If this is important to you, look for a money market account that allows you to write checks and use a debit card. It’s crucial to keep in mind, too, that banks frequently place a cap on the amount of such transactions you can make with money market accounts each month.
Many banks and credit unions provide money market accounts. It can be just as quick and simple to open one as it would be to open a regular checking or savings account. When it comes to the rate of return, the security of your money, and other features, shopping around might help you acquire the best account for you.