"Hands off my savings!" How a money market account helps you save

By Jennifer Rose Hale

Out of sight, out of mind: It's the mantra that keeps ice cream out of your freezer when you're trying to slim down. If something desirable is right in front of your nose, it's hard not to reach for it.

If you struggle with spending and saving, you may find that your wallet--and your checking account--are but brief rest stops for your hard-earned cash. Savings goals can be hard to meet when your debit card and checkbook are close at hand. What you need is a gentle "Hands off!" sign on your money, something that discourages you from readily accessing your cash.

A money market account just might fit the bill.

Money market account: A powerful savings tool

A money market account is a type of deposit account, like your checking and savings accounts. It's FDIC-insured, and there's a good chance your bank of choice offers one. If you compare money market accounts, you'll often find that they offer higher interest rates than other types of interest-bearing accounts.

Learn the basics of a money market account and how money market funds and accounts differ.

Limited withdrawals limit temptations, too

Limited access is one of the main reasons traditional and online banks offer that slightly higher interest rate for a money market account. By limiting the number of transactions you're permitted within a month, your bank ensures that it will have money available to lend to others. Transaction limits are rarely intolerable, but by ticking off a number every time you move money, the limits will send a subtle message--yes, the "Hands off!" message--you may need to hear.

"Train up" to a money market account

Your bank may require a higher minimum deposit to open a money market account, perhaps $10,000, for example. Build up slowly to that amount in a traditional or online high-yield savings account before transferring the amount over. You may want to keep your original savings account open with a $1,000 emergency fund. This account can serve as a buffer, too, reducing your need to interact with your money market account at all.

If your bank requires a $10,000 deposit and that seems too difficult to achieve, compare money market account rates and deposit requirements for interest-bearing accounts at other banks.

Just say no … to debit cards

You may have the option of linking your account to your debit card.

Don't.

If you have to go old-school to interact with your money--driving up to the pneumatic tube at your local brick-and-mortar bank or, heaven forbid, walking up to a teller--you'll be even less likely to touch the balance. Set up automatic deposits to your money market account so your savings can grow without you even having to think about it. If you use an online bank, create a complicated password and then do your best to forget it.

Money market accounts can provide a gentle "Hands off!" for your money, helping it grow in peace. If you need something stronger than that, consider a CD ladder, which keeps your money safe for a fixed period of time while allowing access to it as each CD matures.