What is Money Market Deposit Account and How Does it Work?

There are different types of bank accounts to choose from, and sometimes it can be difficult to decide which one best suits your financial needs. It’s important to determine your goals when it comes to choosing a bank account. If you’re simply looking for a spending account or an account to set up monthly bill payments, then a checking account will make the most sense. If you’re looking to send money to India, then a checking account with remittance services is likely what you’re looking for. But if you’re looking to save money, there’s a variety of options available to you.

A regular savings account gives you a place to simply save your money where you’re able to add or remove funds at your leisure. A certificate of deposit (CD) allows you to lock your money into an account for a fixed term while it earns a set amount of interest. If you want to save money and have the option to write checks, State Bank of India (California) offers a Money Market Deposit Account, or MMDA for short.

THE MMDA BENEFITS

• Competitive Interest Rates

MMDA is an interest-bearing account that offers check writing capabilities, but some banks may have restrictions on the number of withdrawals per month.

Some MMDAs may work on a tier system, so while you’re able to withdraw funds from the account, you must also be aware that the interest rate will change depending on the balance you’re keeping in the account. Just be sure to check whether the MMDA offers a single interest rate, or a tiered rate based on your balance.

• FDIC Insurance

Like other deposit accounts, MMDA funds are insured by the Federal Deposit Insurance Corporation (FDIC). State Bank of India (California) is a member of the FDIC, which means your deposit accounts are insured up to $250,000 per depositor, for each account ownership category.

HOW TO CHOOSE?A MONEY MARKET ACCOUNT

Not all MMDAs are the same, and from bank to bank you’ll likely notice subtle differences. The main thing you’ll want to look at is the Annual Percentage Yield (APY) as a higher yield will earn you more money over a longer period but without having your money locked into a term. However, the interest rate is subject to change at any time.

The second thing to examine is the fee structure. Are there any monthly fees for maintaining an MMDA? Some accounts do not charge fees or may have a low fee if a minimum balance is maintained in the account. Some banks may charge a fee after the 6th withdrawal.

?Finally, you’ll want to ensure you have enough funds to make the account worthwhile. Some MMDAs have a tiered structured and depending on how much you have on deposit, you’ll earn a yield based on that structure.

OPEN A VISION MMDA WITH SBIC

Enjoy a wide range of benefits with Vison MMDA from SBIC. It provides all the benefits of a standard MMDA including the flexibility of withdrawals, security, and a competitive APY. The minimum balance requirement is as low as $100.00 to open and obtain APY.

?If you’re looking for an account that’s flexible and will grow your savings, open an MMDA with SBIC. For more information, click here : Open an account online

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