A money market account is a popular way to save for your future financial goals. Furthermore, these money market accounts are available at almost all financial institutions. But how safe are money market accounts? Let’s explore this topic so that you can determine if you would like to sign up for a money market account at your local credit union.
Are Money Market Accounts Safe?
There are so many things that you can do with your money. The options are almost endless. The safety of your cash deposit is paramount. So with market volatility, you may not want to take the risk and want to keep your funds in a place where it will steadily gain interest. Therefore, a money market account may just be what you need.
Money market accounts are a great way to keep your money safe, earn a great return, and have flexible access to your funds. Now let’s explore the details of a money market account and how you can keep your funds safe.
How Does a Money Market Account Work and How Does it Compare to Other Accounts?
A money market account is a deposit account that operates similar to a savings or checking account. You deposit funds in your money market account and your financial institution pays you interest on your balance as per the terms of your account.
This account is a hybrid between savings and checking accounts. You get a better interest rate than you would with a checking account, you can write checks (with limits), and withdraw using a debit card. Also, it has similar flexibility as a savings account. However, since money market accounts generally have a higher interest rate, then there are higher minimum balance requirements.
Is Your Money Safe in a Money Market Account?
Yes, your funds are safe in a money market account. Your money market accounts are insured by FDIC (if held by banks) and the NCUA (in the case of credit unions). Therefore, you are protected against the loss of your funds in the unlikely event of an institutional failure.
With insurance coverage, your funds are protected up to $250,000 per depositor in each financial institution. Furthermore, these institutions invest the funds from money market accounts in stable, short-term securities that are low-risk, liquid, and are quite safe.
Are Online Money Market Accounts Safe?
You may be wondering if online money market accounts are safe.
Financial institutions are leveraging the latest tech innovations to place their operations online. However, once the credit union or the bank of your choice is NCUA- or FDIC-insured, all deposits in your online money market account are secure (as well as your personal information).
Most online banks have strong cybersecurity policies and practices in place to provide a safe banking experience. These include SSL encryption, firewalls, antivirus protection, and multi-factor authentication. So you can be assured that you are safe investing in an online money market account!
Need to Save for Your Future? Choose Riegelwood FCU!
Just how safe are money market accounts? As we have reviewed their safety and how they work, it’s clear that they are quite a secure investment and savings tool. Choose Riegelwood Federal Credit Union for the best saving vehicles to safeguard your financial future. We invite you to contact us to see how we can help you achieve your financial goals.