It’s no secret that the average American wedding keeps creeping up in price. A “bare bones” affair could still cost a few thousand dollars, and if you go all out, the total may top $100,000. In order to start saving up for your big day, consider opening a money market account. It’s a high-interest savings account that can help you meet your savings goals a little quicker. Here are three reasons why a money market might make sense for you.
Money Market Account Rates
You probably have a substantial savings goal, which makes this high-interest savings account a smart choice. With a basic savings account, the interest you can earn may be minimal. Because a money market may require a higher minimum balance and fewer transactions, money market account rates are very competitive. If you’re diligent about depositing money on a regular basis, you’ll see a better return on your investment.
Now, you may be thinking that the returns could be even higher if you invest in something like stocks. While you stand to gain more, you also stand to lose more. Stocks can be volatile, and your money is not guaranteed.
When you open a money market account at a bank, it’s backed by FDIC insurance up to $250,000 per institution. This means your money is safe no matter what happens to the markets.
Money Market Account Restrictions
Make a wedding budget to keep your expenses under controlFinally, having more restrictive access to your funds is actually a good thing here. There will be plenty of expenses that come up as you plan your wedding, including the costs you didn’t anticipate, like all the meals you ate out as you ran from venue to venue or the great dress you found for your rehearsal while you were shopping for bridesmaids’ gowns. What you don’t want to do in this situation is empty your savings account on these incidental expenses and then find you’re strapped for cash when it comes time to pay the big bills. Money market accounts typically limit your transactions to around three per month (sometimes up to six). This will help you leave your money in the account, accruing interest, until you really need it.
A money market is a great way to save the money you’ll need, but it’s still up to you to spend it wisely. To do this, be sure you fully understand all of the expenses you’ll face. Knowing the approximate total will help you get serious about saving and make financially sound decisions. For example, it may be tempting to splurge on the cake or the honeymoon, but once you realize that will eat up half of your budget, it could be easier to go with the more economical option.
Sponsored content was created and provided by RBS Citizens Financial Group
Photo Credit: JaimeW