Benefits of Money Market Accounts
Money market accounts provide a great form of personal savings for those who want to keep their money safe and liquid. They offer numerous perks and are now popular than cash accounts, since they are available to the public that were formerly accessible only to wealthy investors and financial institutions.
1. Diversification
Since investors often seek to have diversified portfolios, money market accounts offer a solid platform for savings. Through money market accounts, investors can park some money and still earn nice profits, without losing their stated principal.
2. Greater interest
Another reason you should consider money markets is that they allow limited checks or withdrawals on your account. This serves as an incentive to investors, giving them an opportunity to earn greater interest over the long haul.
3. Liquid investments
Money market accounts are categorized as liquid investments because you can withdraw money without any penalty whatsoever. Moreover, money market account lack finite terms as compared to a Certificate of Deposit, which require you to wait for a particular duration to make a withdrawal. In most cases, early withdrawal is penalized.
4. Insured
Since money market accounts are offered by banking institutions, they follow the FIDC safety regulations (Federal Deposit Insurance Corporation). This way, investors enjoy financial security in case the bank goes bankrupt.
5. Higher profits
Money market accounts generally provide higher profits than brick and mortar institutions (e.g., banks). This is because internet-based instruments have reduced overhead as compared to their counterparts, brick and mortar institutions.
6. Convenient
Another reason money market accounts have become popular is the fact that they are easy to create, particularly when done online. For example, they can only take one business day or a few hours.
Having immediate access to your account can encourage spontaneous spending, which is advantageous if you are trying to save.
