Money market vs. savings account: Which one is right for you?

Savings accounts are essential in today’s financial climate. According to a report from “The Ascent,” 71% of US adults have some type of savings account. Placing your hard-earned cash in a savings account is essential if you are working to reach a specific financial goal. Fortunately, some banks and credit unions provide account types that give members higher interest rates, better rewards, and more.

Texas Tech Credit Union offers a traditional savings account and a money market account with higher interest, depending on the amount placed in the account.

What is a savings account?

A savings account is a vital part of an effective financial plan. A healthy savings account can help individuals or joint account owners establish a fund for emergencies, save for major purchases (e.g., homes, vehicles, vacations), pay for medical expenses, and more.

Plus, when it comes to savings accounts, there is no risk. Once your cash hits the account, it’s backed by the Federal Deposit Insurance Corporation — a US government agency that insures money placed in any bank. Financial organizations like Texas Tech Credit Union also safeguard their members' savings through insurance coverage from the National Credit Union Administration, which covers up to $250,000 per person on a single account.

That means the cash in your savings account is liquid and available whenever you need it. Last-minute purchases, unexpected medical expenses, and visits to the emergency room can be paid for with these funds. Money can also be withdrawn immediately or transferred to your checking account to pay with a debit card or check.

The best part of opening a savings account through Texas Tech Credit Union? Regular savings accounts only require a minimum of $5 to be deposited at all times. A Texas Tech Credit Union savings account is ideal for individuals who need quick access to their money and have less than $1,000 saved.

The benefits of a traditional savings account:

• A $5 minimum balance to earn dividends
• No monthly service fee
• Competitive dividends paid quarterly
• Free e-statements delivered to your email
• Free online banking services

What is a money market savings account?

Unlike a traditional savings account, Texas Tech Credit Union’s Money Market Savings account offers a higher interest rate and has a minimum required balance.

Our Money Market Savings account is ideal for members who have higher account balances—the higher the balance, the more interest you’ll earn.

The benefits of our Money Market Savings account:

• The Money Market Savings account is free, so long as your daily balance averages at least $1,000 or more.
• Free checks: You will receive your first 25 checks at no cost.
• Low fees for accounts under $1,000: If your account dips below $1,000, you only pay a $5 daily service fee.
• Free online banking services. Online banking services come at no charge for members with Money Market Savings accounts.

Money Market Savings account interest rates*:

• $1 - $49,999.99: 1.98%
• $50,000 - $99,999.99: 1.98%
• $100,000 or more: 1.98%

Rates Effective: 12/30/2022* Actual rates are subject to change, based on account qualification and underwriting criteria. Fees may reduce earnings. For Current Rates: Call (806)742-3606.

Money market vs. savings account: Which one is right for you?

Not sure which type of savings account best fits your needs? Ask yourself the following questions:

• What is the minimum balance you plan to keep in your account?
• Are you saving for a large purchase in the future?
• Do you need access to the money in your account soon?

To get more information, visit bagmakerblog.com/money-market.