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Money Market Accounts
"As a general rule, it's good to have a cash cushion equal
to three to six months of your expenses. That way if you
were to lose your job or become seriously ill or injured,
you could still meet your obligations."
- Nancy Lloyd, author of
Simple Money Solutions
Money market accounts take you one step closer to actually
investing your money, although you still enjoy the FDIC guarantee
of up to $100,000 per account. Shop around for the best interest
rates, and keep the following tips in mind:
- Money market accounts restrict your access to money by
limiting the number of withdrawals and checks you can write
each month.
- Additional charges may apply if you make additional withdrawals.
- If you continue to make more withdrawals than allowed
each month, the bank may close your account.
- Minimum balances may be as low as $100.
- To avoid fees, you may need to maintain a minimum balance
of anywhere from $500 to $2,500.
Money market accounts are a good place to keep three to six
months worth of emergency cash on hand. You will earn a higher
rate of return than with a traditional savings account, yet
still be able to access cash when you need to.
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