I've got my emergency funds in Sofi savings earning 4%, but seeing others with theirs in a money market reaching 5%ish. Outside of possible minimum balances, etc. what are the drawbacks?

I don't know alot about MM accounts, but from what I've seen there aren't really any big negatives to them compared to HYSAs.

Thanks.

This post was edited on 4/5/23 at 8:55 pm

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Posted by skewbs

Member since Apr 2008

2212 posts

Posted on 4/5/23 at 8:51 pm to NATidefan

How much money are we talking about? 1% point in interest, or less, is really only going to matter if you have a large sum of money. I wouldn’t even worry about it unless we are talking maybe $40K plus at minimum.

This post was edited on 4/5/23 at 8:52 pm

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Posted by NATidefan

Two hours North of Birmingham

Member since Dec 2008

36787 posts

Posted on 4/5/23 at 8:54 pm to skewbs

20k

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Posted by skewbs

Member since Apr 2008

2212 posts

Posted on 4/5/23 at 9:07 pm to NATidefan

So after taxes on the annual interest income earned you’re talking about getting roughly $150 to switch to the MM account paying 5%.

This post was edited on 4/5/23 at 9:08 pm

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Posted by NATidefan

Two hours North of Birmingham

Member since Dec 2008

36787 posts

Posted on 4/5/23 at 9:39 pm to skewbs

Yeah, I suppose it doesn't make loads of difference. But hey, 150 bucks is a 150 bucks,

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Posted by skewbs

Member since Apr 2008

2212 posts

Posted on 4/5/23 at 10:09 pm to NATidefan

Fair enough. And that will compound when you extrapolate across multiple years. Just wanted to point out the nominal amount. But you’re right. Still better than $0 more

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Posted by Topisawtiger

Mississippi

Member since Oct 2012

3696 posts

Posted on 4/6/23 at 5:19 am to NATidefan

Mine is in a hysa at 5.02%. Truthfully money markets are similar to savings except for being able to write checks. Mine has an ATM card I can use.

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Posted by SquatchDawg

Cohutta Wilderness

Member since Sep 2012

20036 posts

Posted on 4/6/23 at 10:28 am to NATidefan

I like MM accounts with the big brokerages because you can pivot to other investments within that same brokerage quickly and don’t have to move money.

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