I've been reading about the basics of personal finance and most resources suggest investments based on benefits that don't seem to exist when interest rates are as low as they are.
For instance: I've read many times over that I should keep my savings in a Money Market Account (MMA) rather than a Savings Account due to the higher returns and potentially lower fees.
When I research MMA's on a site like bankrate.com I see absolutely no difference between:
- Top Yield Savings Accounts vs. Top Yield MMA's
- MMA's with no minimum balance vs. MMA's with large ($10+) minimum balances (in terms of interest rates)
- Fees for Savings Accounts vs. Fees for MMA's
Also, most of the low/no minimum balance MMA's have such high monthly fees that I would have to maintain a large ($10k+) balance just to break even given the extremely low interest rate.
What is it that causes the gap between MMA & Savings Accounts to close?
How should I adjust my investment of shorter-term accessible funds based on these changes?
Specific Context: I am building a fund for the purchase of my first home. Currently it is actually costing me money to maintain this balance in a Savings Account from a national bank. I am set to achieve my goal and purchase in 6 months. I am in a moderately high marginal income tax bracket.