Plat Forms

My favorite place to establish a money-market account is at a discount brokerage firm, but many discount firms don’t like it if you write more than fifteen checks a month; some, on the other hand, could not care less. If you write more than fifteen checks each month, you may find that it is just as cost-effective to keep your checking account where it is and to move only your savings to a money-market account. There may be other rules governing the account—minimum balance, minimum you can write checks for—so keep your needs in mind and ask the questions just listed before you set up the account.
Almost every major brokerage firm, including the discount brokerage firms like Charles Schwab, offer a money-market account. The one at Schwab is called the Schwab One Account. Usually the difference between an account at a full-service firm like Merrill Lynch and a discount firm like Schwab, for example, is the minimum needed to set up the account and the amount of the yearly fee they charge to keep the account. At Schwab you can set up a money-market account for $5,000. il you keep $5,000 in the account at all times, it’s free; otherwise they’ll charge you $5 a month, or $60 a year, unless you make two commissioned trades in the year, in which case there’s no fee. This is better than the CMA account at Merrill, which has an entry fee of $20,000 and charges $100 a year. Merrill also has a money-market account with an entry fee of only $5,000, but it sets limits on the number of checks you can write (three a month) and has a yearly fee of $65.
Yearly Fees
One hundred dollars a year might not seem like much— under $10 a month. But if you’re in your early thirties and open your account at Schwab, saving that annual fee year after year will pay off big. If you keep your savings in there for fifty-five years just growing and growing, that savings of $100 a year at a rate of return of 8 percent will grow to $84,892.32. From just $100 a year.
A quarter on the sidewalk here, $84,892.32 there. . . it’s all the same principle. Money creates money, if you house it well and give it time to grow.