CreditCardsAct

Checking and savings accounts are offered not only by bank, but also by some non-bank businesses. In this article we’ll tell more about three of them.

Credit Unions
They work almost like banks. The main difference is that credit unions are nonprofit member-owned cooperatives. Their members share something in common, such as a labor union, college alumni association, employer, or community. Members’ immediate family also can join.

Interest rates for savings and checking accounts at credit unions are higher than at commercial banks since credit unions return profits to their members. But fees and minimums are lower.
At the same time you should know that usually credit unions offer fewer services than banks. And their access to ATMs is more restricted.

Visit the Credit Union National Association or call 800-356-9655 to learn whether you are eligible to join a credit union, or to locate a credit union near you.

Money Market Mutual Funds
Money market accounts that are offered by mutual fund companies have higher yields than those on banks’ money market deposit accounts (MMDAs).
MMDAs are usually insured against loss by the FDIC, at the time Mutual fund company accounts are not.
A Temporary Guarantee Program is issued by The Treasury Department for mutual fund accounts as part of the government’s rescue efforts to shore up confidence during the credit crisis.

The guarantee is only temporary and the backstop for mutual funds is not automatic.

In practice your chance of losing money is slim because mutual fund companies make it a practice to kick in extra dollars whenever necessary to make sure that they maintain a constant price of $1 per share.

Minimum opening deposit for mutual fund money market accounts typically ranges from $500 to $5,000. Besides it may require that you maintain a minimum balance.

Cash Management Accounts
A cash management account consolidates your investments with your day-to-day cash flow, like a combination bank/brokerage account.

Brokerages offer cash-management accounts (CMAs) for affluent customers who had discretionary income to invest but also wanted a liquid, bank-like account to earn higher interest rates than a traditional bank account.

In a CMA you get checking and credit card privileges, your cash earns money market rates; also you get an ATM debit card, and often a line of credit or a margin account. The interest you’re charged on the loan is likely to be lower than that on a bank overdraft if you overdraw your account.

The fee for CMA usually ranges from $50 to $180 a year. If you have $50,000 or more it may be waived.

You may pay some fee if you ask for advice your investment adviser at your brokerage or who is affiliated with a subsidiary of your bank or make trades through your account. The Securities Investor Protection Corp. protects your cash up to $100,000 in a brokerage CMA.