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“Here with another video today. I want to talk about money market accounts. And why why everybody should have one let s get started. So.
Why does everybody need a market account. You need a money market account. Because you need a storage bucket to be able to put emergency funds in there or any other funds that your visas saving up for an investment or you know for a down payment on a house. If you re putting that money inside of a bank.
Account savings. Account or a checking account. You are losing money you re basically flushing money down. The toilet.
So if you don t remember back in 2006. Or 2007. Timeframe. Money markets were very popular.
There was something like you know an ing direct for example that paid over 5. We have not seen those rates since the financial collapse in 2008. The reason why that money markets have been popping up recently and say 2018 to 2019 b. They became popular because interest rates have risen from.
Basically. 0 for a decade up to 25. Currently so money markets on average pay about two percent to two point three percent or so depending on what the bank. Where the bank is so for example.
Let s go ahead and login to my chase bank. Account and look at the savings account. And what they pay on money. That s just sitting in the account.
So we re logged into my chase account and we re looking at the chase. Plus savings account. Which you know that when i open this account. It was kind of their top tier savings account.
Okay so here it is july 2019 and the interest rate is point o three. Percent. Okay no wonder i have 100. In there okay you re basically those in money.
If you stored you know. 10 20..
30. 100 thousand dollars in this account. You re gonna make pretty much zero. Why would you leave your money in this account.
Okay you re throwing money down. The toilet. Let s go ahead and log into my capital. One money market.
360. Account and compare the two so i m logged in my capital. One 360. Money market account you can see my balance is you know eighteen thousand five hundred ninety eight dollars and you know the annual percentage yield is two percent.
Okay now that s not the highest yield. You can get out there on one of these accounts. There is other accounts out there. Where you can get a slightly higher one maybe two point three percent is about the highest.
I ve seen so you know you need to shop around there s different requirements. But and we will go over that in a minute here interest in july. Sixteen dollars and ninety six cents that pretty much goes up every night. If you log in to look at it depending on how much your balance is so look at this here.
Though. This is an important part interested twenty eighteen nine hundred and thirty eight dollars. That is basically money that you would have wasted and thrown down the toilet. Okay had you left your money inside of a bank account.
Okay look at this here. Twenty nineteen your today so that s six hundred and fifty one dollars. And it s you know the years half over right that s just money that basically is free just for keeping the money in the account. This is the reason.
Why you need a money market account. Let s go ahead and pull up a website here that has a list of money market accounts. If you re interested in looking at money market accounts. I will show you some things to look out for and you know kind of just do a comparison between them here s a list of money market.
Accounts. Eight best money market account rates. Okay and then in the date is june 3rd 2019. So that s pretty up to date you know talks about what a money market account is and you know and all that compares it against you know basic savings counting cds if you don t know what cds are they re basically certificates of deposit.
However there is a major drawback if you have emergency funds or something like that in a cd. Then you are pretty much stuck..
You re locked in for three months six months. You know a year five years three years so cds are not a good option for what we re talking about here. You know short term. Holding bucket or you re saving up for a house or something like that do not put it into a cd put it into a money market account that way you get at least two percent right you know if the inflation is you know to whatever the inflation is right now if they tell you to 2.
It s probably higher than that but you know get something on it that way you re east breaking even right. So let s go ahead and compare these here. Let s take a look at some of these let s go ahead and take a look at the capital one 360 money market account and it s let s say it has a 45 rating a 20. 0 ap y with a minimum balance of 10000 now there is a little caveat to that and i ll tell you in a minute.
You know let s take a look at another one. Here citizens. Access never heard of it you know pays. 22 percent it s got a decent rating the minimum of 5000.
Ok let s take a look at discover here because everybody s probably heard of them. 45. Raney and that s really good. Ok but it pays 19 that s you know that s okay right with a minimum balance of 2500.
That s actually pretty darn good so you notice on here that they say member fdic member fdic member fdic that is super. Important make sure that the bank account that you get a money market account with has that listed on their website for the account. Ok. Why is that important that s important because say another 2008 happens again then you know it s possible that these banks could go under right you need to make sure that your money is protected ok.
There is some more rules behind that okay. There s only a there s an allowable. Limit so i. Think it s like 225000 the last time i.
Looked so you. Know if you have more than 225000. In a bank account. This goes for any bank account.
Okay. I think checking and savings and everything all that included ok you need to start spreading that money up. If you have a million dollars. You need to spread that money up that way or you re protected ok.
Let s scroll down. Here. A little bit look at another. One ok look at this one here popular direct popular direct never heard of it you know it has it okay you know one other.
Ratings actually really bad compared to the other. Ones..
Anyway. 35. Rating it s got a really good. Api though 23.
6. Percent. That s pretty darn good that s higher than the one i have right you know with the minimum balance of 5000. But it doesn t say it s fdic insured.
Which is kind of odd so most likely it is so the best way to find out is just go to the website and usually on the very first page at the very bottom it usually tells you about the rest. Fdic information. So so you know here s a couple other ones you know kind of just reviews their some of their other requirements here. But let s go ahead at this point.
And take a look at the capital one main page. If you were gonna open one of these accounts. So we re on the capital 1. Page.
Here and you know if you want to look at the requirements for a capital one account you just go to check in a savings and then you kind of have a list of the savings options here and as i mentioned earlier. You know you got cd options. Here and you can click on that and see that you ll see that there s you re locked into a you know three month you know one year three year or five. Year but not for much.
More yield it s like literally you know. 03 to 05. Percent. More that s not you know gonna work that s not gonna work for an emergency fund.
Okay you need to make sure that you don t lock your emergency fund up in a cd. Okay and let s just go ahead and pop up the money market. One here take a look and basically it kind of gives you a rundown of what the accounts about okay it basically tells you what it is it s a high yield fee free online bank account that helps you save okay and you know it pays two percent. We saw that earlier and that pays 2 percent on balances over ten thousand dollars.
Okay anything less than ten thousand dollars. With this particular account pays point eighty five percent okay its fee free that is key make sure when you you know do your research. And you re looking for in a money market account that it is fee free you do not want fees eaten your account and as i said earlier make sure. It is member fdic insured as well so here s what i was talking about earlier.
You know anything with ten thousand below its point eighty five percent and anything with ten thousand or more is two percent. Okay now fed raises rates and i know they re talking about recently cutting them you know these rates could go up as well so. If the fed cuts. Then it s a different story.
These rates could go down let s go back to this page. Real quick..
Here and just talk about this savings account. So this savings account. How is that different from the money market account. Well it pays.
1. And you know that s what it s basically any balance. Okay so if you have less than 10000. It will pay 1.
So that is more than the money market account. But that s all a pays you know if you have a hundred thousand dollars in there it s just gonna pay 1. Okay now there is a couple other caveats to it as well like the fact that maybe you can t withdraw you know more than six times a month when the money market account. But the savings account you can so you just need to check that every bank is different for capital one you can only withdraw six times in that month from that money market account.
So most people don t have any reason to do that anyway so so at this point. Let s just sum this up. So you need to get your money out of the bank. Because you re losing money by leaving it in there and getting.
0. When inflation is 2 okay or higher. And you re basically wasting money. So your emergency fund.
You need to get out of the bank account need to get out of your freezer. You need to get it out from underneath a mattress you need to get it out from wherever. It is and stick it in a money market account. Okay i don t care what one you open up do your own research.
I m using capital one i will show you a link as well if you want to sign up with a capital one the reason. I signed up with a capital one account is because i already had a couple of credit cards with them. And you know it took me five or ten minutes to open up this account. So not to mention.
They also gave me 200 of free money because i there was a lot of promotions going on like i said money market accounts got real popular again as interest rates came up so here s the link for the capital one. If you do want to sign up you can use this link. I believe that you get some free money out of this so like i said. There is no obligation at all it will be down in the description as well so.
If you got anything out of this video go ahead and give me a thumbs up go ahead and subscribe. I got more content coming out and we ll see in the next one ” ..
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