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sabrinamariFinding a great money market account is important and easy.
It's important because most "brick-and-mortar" banks (that you can walk into) pay extremely low interest rates on their regular savings accounts---sometimes below 1%. Even their money market accounts have low interest rates in comparison to the interest rates offered by online banks. Right now, online banks offer between 4.5% and 5%, although these rates may drop a bit in future months. Even if they do, they will be *significantly higher* than the interest rates offered by brick-and-mortar banks.
For those who are even moderately comfortable with computers, starting a money market account with a reputable, federally-insured online bank is a *must*.
Money market accounts are especially great for two things:
1. Your emergency fund (First, build a $1000 emergency fund. Then build it up to the equivalent of 3-6 months of expenses over time. Single people probably need closer to 8 months of expenses).
2. Short-term savings that you may need in 3-5 years
A good all-purpose money market account will have these features:
1. It will allow you open the account with very little money, even $1.
2. It will allow you to write checks.
3. It will pay a high interest rate.
4. It will allow you easy access to your money (usually by linking the money market account to your existing checking account---many even offer ATM cards)
5. It charges no extraneous fees
It's easy to find a good money market account and start it with as little as 1$.
Here's how:
1. Go to bankrate.com: http://www.bankrate.com
2. Click on the "Checking and Savings" link in the bar across the top
3. You will a see a window with two options: Checking and Savings. Go to Savings and select "MMA and Savings" from the drop down window.
4. Click on "Go" next to the drop down window. You will then be asked to select your state. Do so and click on "Next".
5. You will be asked to select the major city nearest to you. Do so and click on "Next".
6. You will see a page that has automatically marked "MMA and savings account". Leave it as it is marked and click "Next".
7. It will give you a list of banks that offer money market accounts in a table that gives you alot of useful information. When I do this, the top bank on my list is "Flagstar Bank".
8. Scan the listing and check:
What is the "Rate after Intro"? (It should be above 4.5%--Flagstar's is 4.9%.)
What is the minimum balance to "Open"? (For most of you, it should be $1; some may be able to afford a higher amount.)
What is the minimum balance "To Avoid Fees"? (It should be zero)
What are the monthly service fees? (It should be zero).
Is check writing allowed? (The answer should be "Yes").
As you can see above, Flagstar wins on all these counts---and it's a reputable bank that's FDIC insured. So, Flagstar is a great option. In fact, Michael opened a Flagstar account a few months ago for these very reasons. However, there are other good options listed in the bankrate.com table. You can look through them and find one that fits your needs, if they differ from the specifications I noted above.
If you just want to go to Flagstar:
http://www.flagstar.com/moneymarket.jsp?WT.srch=1&WT.mc_id=0000000016&engine=bankrate&keyword=0000000016
Once you choose a bank, click on the link to that bank to the far right of the table. It should take 15 minutes or less to open your account online. To open a Flagstar (and most other) account/s, you will need:
Your social security number
Your date of birth
A valid driver's license, state ID or your valid, unexpired passport
(It is also a good idea to have a check from your checkbook handy in order to link the money market account to your checking account during the application process).
This will allow you to complete your application and submit it online. Flagstar can either mail or e-mail your signature card to you, and you can return your signature card with a copy of your identification to Flagstar afterwards. Sadly, you must be 18 years or older to apply for this money market account.
So...even if you are dead broke, you can open an emergency fund with a money market account that pays you a good interest rate with $1 and 15 minutes.
It's important because most "brick-and-mortar" banks (that you can walk into) pay extremely low interest rates on their regular savings accounts---sometimes below 1%. Even their money market accounts have low interest rates in comparison to the interest rates offered by online banks. Right now, online banks offer between 4.5% and 5%, although these rates may drop a bit in future months. Even if they do, they will be *significantly higher* than the interest rates offered by brick-and-mortar banks.
For those who are even moderately comfortable with computers, starting a money market account with a reputable, federally-insured online bank is a *must*.
Money market accounts are especially great for two things:
1. Your emergency fund (First, build a $1000 emergency fund. Then build it up to the equivalent of 3-6 months of expenses over time. Single people probably need closer to 8 months of expenses).
2. Short-term savings that you may need in 3-5 years
A good all-purpose money market account will have these features:
1. It will allow you open the account with very little money, even $1.
2. It will allow you to write checks.
3. It will pay a high interest rate.
4. It will allow you easy access to your money (usually by linking the money market account to your existing checking account---many even offer ATM cards)
5. It charges no extraneous fees
It's easy to find a good money market account and start it with as little as 1$.
Here's how:
1. Go to bankrate.com: http://www.bankrate.com
2. Click on the "Checking and Savings" link in the bar across the top
3. You will a see a window with two options: Checking and Savings. Go to Savings and select "MMA and Savings" from the drop down window.
4. Click on "Go" next to the drop down window. You will then be asked to select your state. Do so and click on "Next".
5. You will be asked to select the major city nearest to you. Do so and click on "Next".
6. You will see a page that has automatically marked "MMA and savings account". Leave it as it is marked and click "Next".
7. It will give you a list of banks that offer money market accounts in a table that gives you alot of useful information. When I do this, the top bank on my list is "Flagstar Bank".
8. Scan the listing and check:
What is the "Rate after Intro"? (It should be above 4.5%--Flagstar's is 4.9%.)
What is the minimum balance to "Open"? (For most of you, it should be $1; some may be able to afford a higher amount.)
What is the minimum balance "To Avoid Fees"? (It should be zero)
What are the monthly service fees? (It should be zero).
Is check writing allowed? (The answer should be "Yes").
As you can see above, Flagstar wins on all these counts---and it's a reputable bank that's FDIC insured. So, Flagstar is a great option. In fact, Michael opened a Flagstar account a few months ago for these very reasons. However, there are other good options listed in the bankrate.com table. You can look through them and find one that fits your needs, if they differ from the specifications I noted above.
If you just want to go to Flagstar:
http://www.flagstar.com/moneymarket.jsp?WT.srch=1&WT.mc_id=0000000016&engine=bankrate&keyword=0000000016
Once you choose a bank, click on the link to that bank to the far right of the table. It should take 15 minutes or less to open your account online. To open a Flagstar (and most other) account/s, you will need:
Your social security number
Your date of birth
A valid driver's license, state ID or your valid, unexpired passport
(It is also a good idea to have a check from your checkbook handy in order to link the money market account to your checking account during the application process).
This will allow you to complete your application and submit it online. Flagstar can either mail or e-mail your signature card to you, and you can return your signature card with a copy of your identification to Flagstar afterwards. Sadly, you must be 18 years or older to apply for this money market account.
So...even if you are dead broke, you can open an emergency fund with a money market account that pays you a good interest rate with $1 and 15 minutes.
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no subject
Date: 2007-12-29 12:17 am (UTC)One thing that I like about having an account with them is the easy ability to transfer money back and forth from savings to checking and back again. With new salaries and new expenses in our new town, we're not quite sure how much $$ we need to live but have erred on the side of putting more $$ in savings so we can have saving be our default position. It has gone well for us so far but I would like to maximize the interest.
How easy is it to connect an existing checking account w/a brick & mortar bank to an online MMA?
no subject
Date: 2007-12-29 12:22 am (UTC)Also, Michael has a checkbook and an ATM card for his money market account. That might make a difference to you. However, I think it's a good strategy to be conservative for awhile until you know more about how much it costs you to live in your new home.
no subject
Date: 2007-12-29 04:46 am (UTC)There is a steadily growing cushion of savings in the account that we could put into a MMA that is accessible in 2 or so days. I will look into it in the coming weeks. T is about to get an expense check from work that includes many $$ of relocation money and 2 months rent for our current place so we'll be able to put a good bit of that away in a permanent savings place like an online MMA. But, paying off credit cards will come first!
Even w/checks & an ATM card, that is a bit more work than I have time for. I really like the streamlined-ness of online banking. Since I work from home and have kids in PT daycare & school, taking time out to go to the ATM means taking time out of my workday or dragging 2 kids along - not enticing. I'll have to figure somethingout. Thanks for the links on where to find MMAs!
hugs!!!
Emergency Funds
Date: 2007-12-29 04:48 pm (UTC)Before you put all your extra cash towards paying off debt, think about this:
The one thing you know with certainty is that you will run into surprises that require money. You *will* have emergencies---everyone does. A week ago my jaw and tooth started hurting and voila---I will need 4 wisdom teeth removed in late January. This will cost $2500, and the exams and X-rays to diagnose it came to $130.
Before you start paying down debt (other than your monthly minimums, which must be payed on time to prevent your FICO score from going down) set up an emergency fund. You *will* need it. Without out, you will put your emergencies on a credit card or HELOC, getting deeper and deeper into debt.
With it, you will be prepared for the inevitable. Dave Ramsey and several others I respect suggest setting your first emergency fund goal at $1000, and working towards that first.
Once you've reached that goal, put all your extra money on paying down debt.
Once your debt is down, you can build up the emergency fund to 3-6 months of expenses over time.
Re: Emergency Funds
Date: 2007-12-29 06:58 pm (UTC)no subject
Date: 2007-12-30 09:53 pm (UTC)no subject
Date: 2007-12-31 02:47 am (UTC){Big, big hug}
no subject
Date: 2007-12-31 11:46 pm (UTC)no subject
Date: 2008-01-01 04:23 am (UTC)And thank you, my dear.