As a member of a credit union in New Bedford, there are lots of ways to save and grow your money. A money market deposit account is a type of savings account that you can get at your local New Bedford credit union. It has a lot of similarities to a regular savings account that you are probably familiar with, but also combines some of the elements found in a money market fund.
Money market deposit accounts pay a higher interest rate than a general savings account because they reward members for maintaining a higher minimum balance requirement and limit the number of withdrawals each month. At St Anne Credit Union in New Bedford, members are required to deposit a minimum of $2500 to start their money market deposit account. If the balance drops below $2500 at any time, the interest rate will drop to the rate available through the NOW account.
The money deposited into a money market deposit account is insured at your credit union in New Bedford by the NCUA – the National Credit Union Administration. Similar to the more familiar FDIC or Federal Deposit Insurance Corporation that is used by banks, the NCUA is a federal agency that guarantees your money will still be there no matter what. It is a convenient and safe way to store and grow money that you will use for future investments or have received as the result of recent investments.
How Interest in a Money Market Deposit Account Works
Again, very similar to a regular savings account, the money you deposit into your money market deposit account will earn interest. When you open a money market account at your credit union in New Bedford, you are investing in the assets of the financial institution.
You receive interest on the money that you deposit there as compensation for allowing the credit union to loan that money out to other members. You can access your funds at any time, but the amount of interest will drop if you go below the minimum balance or will cease all together if you close out the account.
In most cases, the interest on money market accounts is compounded daily and is then paid monthly. When interest is compounded daily, the credit union is actually paying you interest on the interest you have already earned, helping you to grow your money even faster. Speak with your credit union in New Bedford for details on how your interest will be calculated and what rate you will receive.
How to Manage Your Money Market Deposit Account
You are able to withdraw your money from your money market deposit account whenever you want. However, check with your credit union representative in advance to find out if there are limits on the number and amount of withdrawals in order to maintain your interest rate each month. Some financial institutions will charge a fee if you do not maintain a minimum balance in your account. This fee will vary from institution to institution, so it’s important to speak with your credit union in New Bedford to find out the details about your money market deposit account.
You will receive a statement of your account from the credit union each month, updating you with information about your account, any transactions that were made, any fees that were charged and, of course, the interest that you have earned. You should keep track of any deposits or withdrawals that you make and check your records with the credit union statement each month to make sure they reconcile.
The best way to grow your money in a money market deposit account is to put more money in each month than you take out. Remember, this type of account combines the best aspects of a savings account and a money market fund, giving you the opportunity to earn more interest while saving your money for future investments or expenditures.
How to Open a Money Market Deposit Account
Speak with your representative at St Anne Credit Union in New Bedford to find out what you need to do to open a money market deposit account. Your representative can give you details about minimum deposits, minimum balances, account fees and current interest rates to help you decide if investing in a money market deposit account is right for you.