Money Market Accounts

With this economy, we’re all concerned with saving money and a savings account is the most well-known way of doing it. On the May 31^st blog post I mentioned another way: CDs (Click here for more information: http://mysystematic.blogspot.com/2012/05/saving-money-with-cds.html ). This week, I’d like to talk about another saving venue, money market accounts.

A money market account (MMA) is a deposit account that is considered a savings account for some purposes, but is an account that acts like checking with interest. With MMAs, checks can typically be written with certain restrictions. They also usually pay higher interest (the interest is based off current rates in the money markets) and have higher minimum balance requirements (sometimes $1000-$¬2500) than either savings or checking with interest. Because MMAs bear interest AND allow for check writing, they are not legally demand deposit accounts.

Since MMAs are not considered transaction accounts, they are subject to the regulations on savings accounts: only six withdrawal transactions to third parties (e.g. the electric company for a bill payment) are permitted per month. Banks are required to discourage customers from exceeding these limits, either by imposing high fees on customers who do so, or by closing their accounts. Banks are free to impose additional restrictions (for instance: some banks limit their customers to six total transactions). ATM, teller, and bank-by-mail transactions are not counted towards the total number of transactions.

If you have any more questions about money market accounts, stop by our 318 South Avenue location or give us a call at 417.862.5036. Here at Systematic, we want to help you find the best saving option for you. Systematic Savings Bank is a Member FDIC.