Can someone explain HYSA vs Money Market account a...
# generalb
brash-raincoat-84042
10/26/2023, 2:09 AMCan someone explain HYSA vs Money Market account and how to choose? And on a related note, when would it be a good idea to go with a CD instead?
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mysterious-tomato-10057
10/26/2023, 2:17 AMThey are all very similar. At the end of day, if they are all in fdic insured accounts, an HYSA, money market account, and no penalty CD are the same if you are just leaving your money there. Pick the one with the best interest rate
mysterious-tomato-10057
10/26/2023, 2:21 AMIt used to be there were more differences, like a savings account was limited to 6 withdrawals let's say, but these rules are melting away. My HYSA has unlimited withdrawals now for example.
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proud-waiter-61863
10/26/2023, 5:50 AMAlly offers FDIC versions of both mm and hysa. They differ in rates but have other differences too including check writing ability.
I think, as Baruch said, the labels hysa and mm are irrelevant. Compare bank accounts based on the rules and rates, not the labels.
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rich-insurance-32675
10/27/2023, 1:50 AMKeep in mind that Money Market funds that are traded on the stock market as mutual funds and ETFs, are not the same as the money market accounts. Bank accounts are FDIC insured and mutual funds are not.
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mysterious-tomato-10057
10/27/2023, 1:51 AMYes. We are talking only about money market accounts
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brash-raincoat-84042
10/27/2023, 5:42 PMthanks. had no idea there was a difference🙈
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gorgeous-computer-9973
10/29/2023, 1:54 PMI would add that a MMA has a debit card, and its usually higher interest rate than a HYSA, so it could be a better choice in some cases, I for example use an Ally MMA for my emergency fund (the debit card is out of reach of course), currently with a rate of 4.40
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mysterious-tomato-10057
10/29/2023, 1:55 PMI definitely haven't found that it usually has a higher interest rate. It seems to be a mixed bag. My HYSA is at 5% right now.
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gorgeous-computer-9973
10/29/2023, 1:58 PMAnd as for CD's, very important, you can usually only contribute money in the initial period, so if you want to contribute money frequently, CD's is NOT an option.
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mysterious-tomato-10057
10/29/2023, 1:59 PMOr you can just keep opening CDs at the new rate which may be higher. Especially if you use no penalty CDs. I just open a new CD and then move my old one into new one at the higher rate if I'm contributions regularly.
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brash-raincoat-84042
10/30/2023, 12:34 AMany recommendations for no penalty cds?
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mysterious-tomato-10057
10/30/2023, 12:37 AMI love and use Marcus.
https://www.marcus.com/share/JAC-G54-WUFA (We each get 1% additional APY for 3 months)
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brash-raincoat-84042
10/30/2023, 12:49 AM@mysterious-tomato-10057 if you're saying hysa,mma and cd are all basically the same why do you have both hysa and cds? Whats the benefit of diversifying here?
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mysterious-tomato-10057
10/30/2023, 12:52 AMNow that's a good question!
I use CDs for money that I'm comfortable locking away and HYSA for money that I don't want to lock away. My 5% HYSA is better than any no penalty CDs I have found.
mysterious-tomato-10057
10/30/2023, 12:52 AMMy checking is with Ally so I have a MM with them just for my overdraft savings account linked to my checking.
mysterious-tomato-10057
10/30/2023, 12:53 AMLet's say a security deposit for a rental property, I'll put that in a CD since I can't invest it but also don't need to use it for anything.