Is the SunTrust Money Market Account Worth It? (STI)

A money market account is a type of savings account in which the bank invests your funds in a series of short-term, highly liquid and very safe financial instruments, such as U.S. Treasury bills (T-bills), municipal notes and certificates of deposit (CDs). Most money market accounts pay higher interest rates than standard savings accounts but offer the same level of safety. Like savings accounts, money market accounts are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per depositor.

Money market accounts are viable investment vehicles for those who need to access their money in the near future but wish to earn at least a little interest on it in the meantime. For example, a person planning to buy a house in six months might take his down payment money out of the stock market and place it in a money market account. This way, his principal is protected and he still earns something on it.

For investors shopping for a money market account, the SunTrust Signature Money Market Savings Account, offered by SunTrust Banks, Inc. (NYSE: STI), is one to consider. It offers low fees for investors with high balances or regular monthly transfers. SunTrust maintains a solid reputation for customer service and has many physical branch locations, particularly in the Southeast region of the country. On the downside, this money market account pays lower interest than several comparable accounts from online banks, and its fees add up quickly for investors with low balances.

Perhaps the biggest advantage of the SunTrust Signature Money Market Savings Account is that it is offered by a reputable bank that maintains a strong physical presence in many parts of the country. SunTrust has a solid reputation with its customers, including an A-plus rating with the Better Business Bureau (BBB). As of 2018, the bank maintained nearly 1,400 branches. Its money market account is FDIC-insured for up to $250,000. Since it is very rare to hold more than this amount in a money market account, the entirety of a borrower's investment should be protected in the highly unlikely event of a bank failure.

For borrowers who maintain balances of $5,000 or more, or who agree to make regular monthly deposits of at least $100, the bank waives all account maintenance fees. The interest rate jumps substantially for account balances over $10,000. As of 2018, the account paid 0.01% interest.

The highest interest rate offered on a SunTrust Signature Money Market Savings Account is 0.6%, and this rate only applies to balances of $10,000 or greater. In effect, customers give up some yield for the convenience and reliability of a reputable brick-and-mortar bank. Strictly online banks, such as Ally Financial (NYSE: ALLY), which maintain no physical presence and thus have lower overhead costs, offer savings vehicles that pay higher yields, sometimes 1% or more.

Fees represent another disadvantage of the SunTrust money market account. It imposes a $15 monthly fee on accounts that do not maintain balances of $5,000 or receive regular monthly deposits of at least $100. Each inbound wire transfer costs customers another $15 in a given month; excess activity, such as withdrawals and transfers will also incur this fee.

The SunTrust Signature Money Market Savings Account is ideal for customers who prefer to conduct business with a longstanding, reputable bank that offers physical branch locations and are willing to pay a little more to do so. Those more concerned with receiving the highest yield possible and who do not mind conducting business entirely online may find a better fit with an online bank.