Image by kalhh from Pixabay
Image by kalhh from PixabayPassive income is a source that earns money for you with minimal effort. In the case of HighYield Savings Accounts (HYSA) and Money Market Accounts (MMA), it does not get much less in effort and can actually generate money while you are sightseeing! What are some basics to know?
  1. A main difference between HYSA and MMA is in access. An MMA typically comes with a checkbook whereas a HYSA will not.
  2. The initial investment with an MMA is generally higher than that of a HYSA.
  3. There are often amounts that must be maintained in these accounts when withdrawals are permitted.
  4. Both options are relatively safe. MMAs are insured up to $250,000, per depositor, by the Federal Deposit Insurance Corporation (FDIC).
Money Market Account vs. Money Market FundsImage by whocaresaboutit from Pixabay It might be thought that Money Market Accounts and Money Market Funds (MMF) are the same thing. This is not the case. An MMF often offers a higher return than an MMA. However, the MMF does not have a guarantee on the principal as they come by means of fund companies. MMAs are offered through financial institutions which are insured. Access Image by mohamed Hassan from PixabayA HYSA often does allow for transfers of money between accounts. They do provide a higher yield to the traditional savings account, without monthly fees, and with lower minimum requirements. A con for them could be that they do not usually have local access (are often offered only by online banks) which would rule out using ATMs for fund access.   Finding your bank Research into available interest rates is important to do for either option. While investigating local banks, remember that there are a large number of banks, and financial institutions, which are accessible online with a simple “rate” search for the type of account being considered.

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