About Money Merge Accounts

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A money merge account is a checking account used to deposit entire pay checks so that the money earns interests and lowers the amount of interest paid on mortgages. Consider using a regular checking account instead of money merge accounts, as money merge accounts are sometimes more expensive, with advice from an investment consultant in this free video on checking accounts.

Part of the Video Series: Personal Finance & Money Management
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Video Transcript

Hello I'm Roger Groh. Today we're here to talk about money merge accounts. What they are are checking accounts where you deposit your entire pay check into the checking account. The theory as your money goes into the checking account it generates interest and that interest reduces the amount of interest that you would pay on your mortgage. The problem is that the mortgage that is associated with this that can take money out of there to pay itself really pays you less interest than you would make if you just opened a regular old checking account at your bank and sent your mortgage company a check every month so be very careful. What they are, they're checking accounts. You contribute into there your pay checks and you pay out of them any living expenses that you have plus the person that you owe money to for your mortgage then withdraws the money out of there to pay the mortgage. Whatever cash is left generates some interest and that interest also is supposed to reduce what you pay on the mortgage so be very careful when it comes to money merge accounts. You would be far better off opening your own personal checking account at your own bank with nobody who has access to it, contribute your own pay check into there and then simply send a check to your mortgage company every month. I'm Roger Groh and that's a little bit about money merge accounts.

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