Money Market Accounts: Balancing Liquidity and Returns
Money Market accounts also known as MMAs offer a unique blend of liquidity and earning potential, making them an excellent choice for individuals looking to maximize their savings while retaining access to their funds. Understanding how Money Markets work, including minimum balances, tiered rate structures and withdrawal limits, is important to understand before opening an account. Learn how Money Markets can be a strategic tool that can help you save for specific goals such as buying a vehicle or funding higher education.
Liquidity and Accessibility
Liquidity simply means that you can access your money when you need it, unlike a Certificate of Deposit (CD) and other investment accounts where you may incur a penalty to withdraw funds.
Money Markets are particularly beneficial if you are looking to earn a return on your deposits without sacrificing access to your cash. Accessing your funds is easy, either in a branch, at an ATM or managing on digital banking. These accounts typically offer higher interest rates compared to traditional checking and savings accounts yet provide substantial liquidity.
Interest Rates and APY
When compared to traditional savings accounts, money market accounts generally provide better interest rates and annual percentage yields (APYs). The higher the interest rate of return, the more money you earn on the funds deposited. This is because Money Markets usually require higher minimum balances than savings accounts, which allows financial institutions to offer a higher return. Understanding these differences can help you choose the right account type based on your financial situation and goals.
Maximizing Returns
To maximize the returns on your Money Market it is important to shop around for the best interest rate, also known as rate of return. KEMBA's Money Market Accounts offer competitive rates that can help grow your savings and achieve your goals faster. In addition to maintaining the minimum balance based on the rate tier, setting up automatic contributions from each paycheck can further boost your savings growth, ensuring you make the most of your money market account.
Tax Implications
It's important to be aware of the tax implications associated with Money Market accounts. Like most interest-bearing accounts, the interest earned from Money Markets is taxable, and you will receive a 1099-INT form from your bank or credit union, which details the amount of interest you need to report on your tax return.
Open a Money Market Account With KEMBA
If you are looking for a savings account that can offer the benefits of both liquidity and a great rate of return, explore a Money Market account with KEMBA Financial Credit Union. Whether you are saving for a big purchase, like a car with our car loans, or simply building a financial cushion, a KEMBA Money Market could be the perfect solution for managing your personal finances effectively.
To explore how KEMBA's Money Market accounts can fit into your financial strategy, we invite you to visit our website. You can also contact our dedicated member service team at 614.235.2395 and select Option 4 to get started. For more personalized service or if you have specific questions, please visit a local KEMBA branch. Let us assist you in finding the right financial tools to grow your savings and achieve your financial goals.