Savings account or money market accounts?A group of us (4) are quitting smoking. So in turn we are setting aside the money that was originally budgeted for cigarettes and want to put it in some form of account that will gain a profit over the next year because we plan on taking that money and rewarding ourselves with a Caribbean Vacation. We need to be able to deposit money every other week. Ideally, we would like something that is high yield, but I don't think that is completely possible. What types of accounts would be suggested?
Alex
Check online for the banks & credit unions in your area to see what the terms are for their accounts. Typically a money market account will earn a higher interest than a savings, but there may be other stipulations to consider. The account may require a minimum balance to avoid monthly fees or limit the number of transactions each month. Generally speaking credit unions offer a higher interest rate, but there are fewer locations available to make the deposits. If you have direct deposit through work, see if the company allows you to split the deposits: a specific dollar amount into this new account, and the rent into your current account.
Why poor people are idiots
If you are saving for a full year and want to earn interest the MMA would be best. A savings account is not a form of investment. It is just a place to stick your cash while you are saving for a specific cause.
Caveat Emptor
There are no "high yield" savings accounts at the moment.
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