Personal finance | January 8, 2019 | Rob Zodda
Setting financial goals? Here’s one financial resolution you can actually keep.
What you'll learn
- How to check “save more” off your financial resolutions list
- What a money market account is
- Why you can save more with a money market account
I’ll start with a disclaimer. This isn’t one of those articles that tells you to save money by packing your lunch or giving up your daily latte. We’ve all heard that advice again and again (and again). Those tips work. But if you’re looking for one simple, painless way to make your money work harder and save more in 2019, read on.
How to save more money in 2019
Open a money market account
Even if you’ve been killing it in the saving department, you might not be earning as much interest as you possibly can. With a traditional savings account, you could be earning just pennies in interest each month. If there was a simple way to earn more, wouldn’t you want to do it?
If you want to earn more interest, look into opening a money market account. A money market account is like a traditional savings account, but better. Money market accounts are better because they usually offer higher interest rates than traditional savings accounts—some more than 20x the national average!
Online banks usually can offer higher rates because they don’t have the expense of maintaining brick and mortar locations.
If one of your financial resolutions for 2019 is to save more money, a money market account could help you achieve it, by growing your money faster.
How to open a money market account
Money market accounts are easy to open and many have low minimum amounts. You could start with just $10!
If you’re already saving in a traditional savings account, consider transferring some of those funds into a money market account and setting up automatic deposits from your paycheck. That way, you’ll be putting money away before you even have a chance to miss it.
A money market account is great for funds you don’t need access to every day—like if you’re saving for an emergency fund, a new car, or if you’re making a plan to pay for college.
The details about money market accounts
One thing to keep in mind with money market accounts is that they usually limit the number of withdrawals and transfers you can make each month. But hey, the whole point was to save more, right?
Another point to consider is how you’ll withdraw money when you need it. If you’re using an online bank, with no branch locations or ATMs, you’ll need to have another bank account you can transfer the money to.
You’ll also want to make sure your money market account is FDIC-insured. This means that your bank participates in the Federal Deposit Insurance Corporation program. Most accounts insure up to $250,000. If you’re able to save more than that (you rock star, you), split up your savings among multiple accounts.
Make good on your financial new year’s resolution
A money market account won’t help you get rich. But it’s a simple way to save more money in 2019—and every little bit helps, especially if you’re just starting out.