TRANSCRIPT:

Hi Greg Vojtanek here of Fade In Financial. If you have a bunch of extra money sitting in your checking account, first of all, congratulations. But secondly, maybe you should think about it a little bit differently and take some of that money out of your checking account and put it into a money market fund.

Money market funds are generally better than a savings account, which means they’re going to work harder for you and get more money back in return.

Currently a money market fund can give you a return of around four percent or so. So if you take some of that excess money that’s in your checking account, which is currently making zero dollars, put it into a money market fund making around four percent, that money’s working for you.

Now that money’s also going to generally keep up with inflation. So if you kept it in your checking account and you want to buy something, let’s say, for one hundred dollars. And you kept that one hundred dollars in your checking account, and one year later that thing you wanted to buy for a hundred dollars, is probably going to be worth more than a hundred dollars now, and you can’t afford it. So your money that you kept in your checking account actually lost value.

Had you put that same hundred dollars in a money market fund and it grew by four percent, your hundred dollars would now be worth a hundred and four dollars. If inflation was three percent, then you can afford it.

Money market funds are very similar to cash. You can have easy access to it, and you can transfer it to your checking account usually within a business day or two. Check with your financial institution.

So I recommend taking some of your excess cash that you have sitting in your checking account, put it to work in a money market fund, and you might see it grow a little bit.

Everyone’s situation is different. Do what is right for you. Thanks for watching.