MM Money

Where To Keep Your Rainy Day Fund

Even if your rainy day fund is small, it's big enough to deserve the best account you can find to keep it in. Often, a money market account, or MMA, will do the trick, but there are also high-yield money market accounts, high-yield savings accounts and money market mutual funds -- or money funds -- to consider.

Whether you're saving for emergencies or an upcoming purchase, you want this money to be liquid and you want convenience when making deposits and withdrawals. One drawback with high-yield accounts is that you may have to go online to open one. While millions of Americans are overcoming their phobia about this, many people still aren't comfortable plunking their cash in an online bank with no chance for face-to-face interaction with bank personnel.

Money market accounts are souped-up savings accounts that, generally, give you the ability to write a limited number of checks against the account each month. You can open one at just about any bank or credit union and your deposits are insured up to $100,000 by the Federal Deposit Insurance Corp. or the National Credit Union Association. The average interest rate is around 0.50 percent at a bank and about 1 percent at a credit union. That's about double what you'd get in a regular savings account.