Money Market Accounts: Your Questions Answered

MEMBER: I have some extra funds I’d like to put away, and I’m wondering what would be the best place to keep them. Can you help me out?

CREDIT UNION: How about a Savings Account? Your money will be insured up to $250,000 and will grow at a modest rate until you are ready to use the funds.

MEMBER: I already have a Savings Account, and it suits my basic savings needs. But, I’m looking for something that can earn more, yet has some accessibility because I may need to use this money in the near future. 

CU: I see. That makes a lot of sense. Have you thought about opening a Checking Account?

MEMBER: Well, I’ll be honest, I don’t have the discipline to keep my extra funds in checking. My checking account is perfect for day-to-day spending, but I’d rather keep these extra funds in an account where I will be less tempted to use them and which will give me a higher APY so my money has a better chance at growth.

CU: So you need an account that blends the convenient accessibility of a checking account with a premium APY for keeping it less likely to be quickly withdrawn, is that right?

MEMBER: Yes, exactly.

CU: I have the perfect solution for you. Has anyone ever talked to you about a Money Market Account?

MEMBER: A money market account? What’s that?

CU: It’s exactly what you need! A Money Market Account offers convenient features of liquidity and an attractive rate of return to help your money grow.

MEMBER: What kind of APY would I be getting with a money market?

CU: FPCU's Money Market Accounts offer an APY starting at .20%, up to .45%, depending on your balance. That’s more than double what you’re getting on the balance in your savings or checking account.

MEMBER: Wow! What’s the catch?

CU: There are no “catches” here, but there are some important things you need to know about money market accounts.

MEMBER: Like what?

CU: There is a minimum average daily balance of $1,000 in order to earn dividends.

MEMBER: So I’d need a large sum of money in order to open a money market account?

CU: Not quite.While some big banks won’t let you open a money market account without a minimum deposit of $3,000 or more, here at FPCU, there is no minimum deposit. 

MEMBER: That’s convenient! What else do I need to know?

CU: You’re free to access the money in your money market account without penalty, but there are restrictions on the number of transactions you can make each month. If you own a Money Market Account, you can make up to 6 free withdrawals from your account during each statement cycle.

MEMBER: I see. Can you share what kind of expenses I would fund with this account?

CU: A money market is not designed to be used for everyday expenses like a checking account is. It makes more sense to use these funds for large, occasional expenses like tuition payments, emergency household repairs and unexpected medical bills. You can also put away a tidy sum to use as spontaneous splurge money when the desire strikes. Or, you can keep your quarterly tax payments in your money market until they’re due so you earn dividends on this money while it’s waiting to be spent.

MEMBER: Do money market accounts have a maturity date indicating when I must withdraw the funds?

CU: Absolutely not. Unlike share certificates, there is no maturity date for money market accounts and no term requirement. You can keep funds in your account for as long as you’d like.

MEMBER: That’s convenient. Are there any hidden fees I should know about?

CU: There is no monthly maintenance charge for your money market. Also, we won’t charge you a fee for accessing your money via an ATM if you stay within your 6 withdrawals limit per month. 

MEMBER: Great! But is my money safe in a money market?

CU: A money market account is always secure. Your funds are insured up to $250,000 by the NCUA. This makes it a safer choice over a stock investment. You won’t lose this money in a market crash or a poor choice of investment.

MEMBER: Wow! This sounds like it’s just what I’m looking for. How do I open one?

CU: If you’re ready to open a money market account, we’re here to help. You can start the membership application process online, or stop by FPCU at your convenience and a member service representative will be happy to assist you. As always, we’re committed to helping you achieve and maintain financial wellness in the most optimal way possible. We look forward to serving you and helping you meet your personal finance needs.