When it comes to choosing a money market account, one of the key factors that you need to consider are the fees associated with the account. Money market accounts are a popular choice for individuals who want to earn higher interest rates than traditional savings accounts while still having easy access to their funds. However, it’s important to be aware of the potential fees that could eat into your earnings.
One common fee associated with money market accounts is the monthly maintenance fee. This fee is typically charged if your account balance falls below a certain minimum threshold. The minimum balance requirement varies between banks and can range from as low as $1,000 up to $10,000 or more. It’s important to review the terms and conditions of each account before opening one to ensure that you can meet this requirement consistently.
Another fee that some money market accounts may charge is an excessive transaction fee. Federal regulations limit withdrawals and transfers from money market accounts to six per month. If you exceed this limit, your bank may charge you a fee for each additional transaction. The excessive transaction fee can range from around $5 up to $25 per occurrence, depending on the bank.
Additionally, some money market accounts may have fees for services like paper statements or check writing privileges. While these fees may not be significant in isolation, they can add up over time if you frequently use these services.
Foreign transaction fees are another consideration if you travel internationally or make purchases in foreign currencies using your money market account debit card or checks. These fees typically range from 1% – 3% of the total transaction amount but can vary among different banks.
Finally, it’s worth noting that some banks offer premium money market accounts with added benefits such as waived monthly maintenance fees or ATM reimbursements in exchange for maintaining a higher balance or having other banking relationships with them.
In conclusion, when considering a money market account, it’s crucial to carefully evaluate all potential fees associated with each account. By understanding and comparing these fees, you can select an account that aligns with your financial goals and minimizes unnecessary costs.