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.

Another reason many people were reluctant to think they couldn’t take advantage of a money-market account is that they thought they didn’t have enough money to open one or that they wouldn’t always have the minimum it takes to keep one open. Not necessarily the case. Many funds don’t require all that much to open them, don’t charge high fees if your balance drops, and don’t require a minimum balance. They’re smart. They know that just by opening the account, you’re on your way.
When I first became a broker, most of—in fact, all—my clients had far more money than I did. It felt funny to me sitting there, with my $2,000 of Macy’s credit card debt hanging over me, telling people what to do with their money. But I decided that since they had so much more than I did, I should listen to them as much as advise them. My dad always said, “Suze, when in doubt, do what someone who is successful does.” So when this CMA account came along, and I had never seen so many rich people jump on something so fast, I thought, Okay, I need to get myself one, too.
But who had $20,000? None of my friends did, but when
told them about the account, they all wanted one as much as
did. So we came up with a scheme. We needed $20,000 to open the account (today you can find other great ones for far less,
noted on page 180), so we decided to pool all our money
come up with about $1,000 more than the minimum needed. First one person would take all the money to open an account, then one week later withdraw all but maybe $100 (once opened, there’s no minimum balance, remember?). Then the next person would do the same thing, and so it went, all the way down the line. When the last person had her account,
the money was given back to its rightful owners and deposited into our correlating money-market accounts.
We were all so proud. Most of us had gone in with about $3,000, and we knew that the $100 fee was nothing
pay to get all the advantages and the 18 percent interest rate back in 1980. Most of us still came out $440 ahead that year, and that was a lot of money. (If I had known better back then I would have had everyone sign a promissory note or some documentation showing what belonged to whom, in case something happened to the one who had all the money.)

Your money needs to be in the holding place where it will earn the most it can for you; it’s that simple. Otherwise, like Rob, you could be losing thousands of dollars a year.
So wherever your money is now, ask yourself the following questions—and if you don’t know the answers, find out:
How much is the money in your checking and savings accounts earning?
How much do they charge you for your checks or as a service fee?
Now you need to find out whether you can get a higher interest rate somewhere else, whether you can be charged less in fees, and whether you can establish an account that is just as safe and just as convenient. The answer is probably yes.