money market account vs high yield savings

Now currently during 2021, rates are so low that it doesn’t make sense to worry about where you’re saving your money, the best thing you can do is invest your money.

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1. Now let’s start this video with what you don’t want to do:
– Big banks are great for big things
– Like getting great rates on a mortgage, credits cards, and even car loans which I never recommend
– But because they have so much leverage, they don’t have to pay a bunch of money to the savings account

Currently: the Three Biggest Banks and Most well know banks offer this
– Chase: .01% for every $10,000 you save they pay you $1
– Wells Fargo: .01% every $10,000 you save they pay you $1
– Bank of America: .01% every $10,000 you save they pay you $1

That’s not all:
– Most of them also require a minimum balance and if you don’t have that, they will usually take around $5 as a maintenance fee
– And it only takes $50k in savings to produce $5 a year
– And you only need $600k in savings to get paid $5 per month before taxes

Obviously this ridiculous:
– And where they pay you .01% or 1 or 2%, it doesn’t matter
– Because you are not making any money, because of inflation
– So savings or money market account should be used for emergency savings, savings up goals, and that’s it ( not as a vehicle to make money )

2. Money Market Account vs Savings Account
– The big thing you need you to know, is that they are both insured by FDIC ( so if the companies go bankrupt the government will cover up $250k)
– And if you more than that, you can spread it between accounts to cover more of that money

Money Market Account:
– They use to be pretty cool because they offered a debit card
– Higher rates than a traditional savings account
– And more flexibility than having a cd

However:
– Today we high yield savings with literally all those same pros
– So it uses to be cool, but now the feature is more of a requirement than anything special
– And they both have regulation on how many transactions you can do per month
Overall:
– Modern high yield savings are virtually better sometimes than money market accounts ( and during certain times, the truth is vice versa )
– So if you ask me which is best, I would tell you it doesn’t matter, just make sure you don’t have any required balances, monthly fees, or any other fees, and I’m happy
– Again neither a money market account or a savings account Is going to make you rich

3. What I Recommend
– If you’re looking for a place to store cash and get a competitive rate
– I usually recommend sofi or wealth front, they both have debit cards
– And remember companies use rates, to catfish new customers, then they switch them ( so find a company you like and stick to it )

Tip: once your debt-free, have an emergency account, I recommend you start investing 20% of your income if you have no kids and 25% of your income if you do have kids. I have videos on this.

Link Video: https://www.youtube.com/watch?v=kWwhJ0Oos2c

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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