In this troubled economic slump we find ourselves in, it’s not uncommon to feel ambivalent or confused about how to best handle a savings, no matter how big or small. Fear of losing what we’ve worked so hard to save is often a sure cause for static immobility, and a failure to take beneficial and rewarding action with our money; I know, because I’ve been there personally. Until recently I was one of those unfortunate souls immobilized by the fear of losing my family’s savings.
Yes, leaving your money in a risk-free, yet relatively yield-free account or other financial position ensures that you won’t lose any money; but it also ensures that you won’t gain any substantial interest with that hard-earned savings either. But there really are a few great options out there that are more risk free than most people realize, making it a shame to leave your savings sitting idly by collecting dust and pennies.
Utilizing the option of money market accounts in particular can be a great ticket to gaining you and your family much-needed money and simultaneously affording you the freedom to use that money when and how you please. In my case, it’s done just that, and be a true God-send toward our future financial freedom. Before considering a money market account, it’s important to understand exactly what they are.
Unlike CDs, or, certificates of deposit, money market accounts are essentially checking accounts that operate like mutual funds.
What that means is that the money you place in these accounts will be invested in short term instruments that offer higher annual percentage yields than standard savings accounts or CDs, while also maintaining safer investment options than most long-term mutual funds do. Money market accounts attempt to keep share prices of these options above or equal to at least a dollar a share.
The big kicker is that they also operate as a checking account, allowing you to take money out as you see fit, unlike most CD options, which specify that you must leave the sum alone until it has reached maturation to receive the set interest percentage.
What I’ve found so personally great about these accounts is that almost every financial institution or bank offers some type of money market account, with usually great interest rates. My personal Discover Bank money market rates were too good to pass up, although there are plenty of similarly great options out there as well. Having banked over an extra $3,000 dollars with my account by doing virtually nothing over the past year, I can’t stress how worthwhile looking into these accounts can be if you’ve got a current savings sitting idly by. Do your research, check out the options, and watch the savings pile up: your family, and your bank account, will thank you soon enough.
**Photo by Tax Credits on Flickr**