Best Money Market Account Rates
*APYs accurate as of June 5, 2024
How Do Money Market Account Rates Compare?
Here’s how money market accounts compare to CDs, savings accounts, and checking accounts for the banks we highlighted:
Money Market Account | High-Yield Savings Account | CD Accounts | Checking Account | |
Quontic Bank | 5.00% | 4.50% | 4.30% to 5.05% | 1.10% |
EverBank | 4.30% | 5.15% | 3.90% to 5.05% | 0.40% |
Vio Bank | 5.30% | 1.10% | 2.75% to 5.25% | N/A |
Zynlo Bank | 5.00% | 5.00% | N/A | 2.00% |
Sallie Mae Bank | 4.65% | 4.50% | 4.00% to 5.10% | N/A |
Discover Bank | 4.05% | 4.25% | 2.00% to 4.70% | 1.00% Cash Back |
Ally Bank | 4.20% | 4.20% | 3.00% to 4.50% | 0.25% |
How To Use Money Market Accounts
Money market accounts are versatile tools that you can work into your financial strategy in a number of ways.
Flexible Savings
A money market account can be an excellent option for savings if you want to have access to your money at any time but also earn an APY that’s comparable to some certificate of deposit (CD) rates. This flexibility makes them ideal for short-term savings goals such as weddings or vacations.
Ask an Expert
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Brandon Renfro
Ph.D., CFP, RICP, EA
“Remember that money market accounts are short-term vehicles. While they do currently offer competitive rates, those rates can change quickly, so they may not be a good place to hold your long-term savings.”
Diversified Savings Strategy
Money market accounts can complement traditional savings accounts and CDs, diversifying your savings. Anand Talwar, head of deposits and president of Ally Invest Group at Ally Financial, emphasizes the importance of using a mix of savings options to help you meet your financial goals.
“Diversification is key, and you should consider utilizing different types of accounts when you are saving for something down the road, like your child’s college tuition or retirement,” he said
Easy Transactions
Many MMAs offer checks, debit cards, ATM access and electronic transfers such as Zelle, giving you flexibility in managing your money.
Secure Investing
MMAs are safe investment tools since they’re protected by FDIC or National Credit Union Administration (NCUA) for up to $250,000 per bank or credit union, per person, per ownership category. This allows you to safely grow your savings without worrying about losing money.
Current Money Market Rates
Every month, the FDIC uses data from financial institutions to determine the national average interest rates for different types of deposit accounts. The national average interest rate for money market accounts is currently 0.68%. However, our picks for the best money market accounts on the market have APYs roughly six to eight times that rate — around 4.2% to 5.3% APY.
To earn top money market rates, you may need to meet certain requirements. For instance, you may not earn interest until your account reaches a minimum balance. A financial institution may also have balance tiers where you get better APYs as your balance increases, or your money might earn a much lower rate after reaching a certain limit.
Alternatively, an account might advertise a promotional rate that drops after a certain time frame.
Date | Highest Rate |
June 5, 2024 | 5.40% from Sovereign Bank |
Factors That Affect Money Market Rates
Money market rates periodically change based on the economic environment and actions the Federal Reserve takes, such as raising or reducing the federal funds rate. But ultimately, financial institutions decide the rates they’re willing to offer.
Inflation is one economic factor that impacts money market rates. High inflation hurts customers’ purchasing power. It can leave them with less money to put in deposit accounts and increase the demand for loans, which can help drive interest rates higher.
The opposite typically happens with low inflation since interest rates normally decline when customers have more cash to save and demand for loans goes down.
The Federal Reserve is responsible for managing U.S. monetary policy, including rate changes aimed at influencing inflation and employment levels. It sets the federal funds rate, which is the median interest rate financial institutions pay for overnight loans from one another. Because this rate affects banks’ costs, it impacts the rates they offer consumers and businesses.
The Fed holds regular meetings to discuss the economy, and it may adjust the federal funds rate in an effort to increase employment levels and get inflation to its target rate of 2%. Raising this rate aims to slow the economy, reduce inflation and encourage saving. When inflation is controlled, the Fed may lower the federal funds rate to help the economy grow, boost employment levels and increase borrowing.
However, banks make their own decisions on changing their interest rates.
Financial institutions monitor the federal funds rate since it affects their borrowing costs. They may raise or lower their money market account rates depending on competition and the need for customers’ deposits. They also adjust their loan and credit card rates to encourage or discourage customer borrowing.
Banks and credit unions may offer money market account promotions to gain customers. Online institutions often pay better rates on these accounts than traditional institutions with higher expenses such as branches and the staff for them.
Pros and Cons of a Money Market Account
It’s important to weigh the pros and cons of any product before you make an investment. Here’s a quick rundown of what to consider:
Competitive APYs available: Although some CDs have higher rates, you can get a very competitive APY on a money market account, especially one from an online financial institution.
Liquidity: MMAs generally provide easier access to your money than other accounts, often allowing for checks, bank cards and Zelle transfers without the early withdrawal penalties common with CDs.
Safe investment: A money market account with FDIC or NCUA deposit insurance is a secure choice since up to $250,000 is safeguarded.
Balance or deposit requirements: An MMA could have a minimum balance requirement or minimum deposit amount that’s required to get the best APYs.
Limited transactions: Some MMAs limit the number or amount of certain types of transfers you can make each month or statement period.
Fees: Potential account fees, such as a monthly maintenance fee or transaction fees, could impact your overall returns.
Money Market Accounts vs. Money Market Funds
Money market funds can earn competitive yields and be very safe, but they’re mutual funds rather than NCUA- or FDIC-insured bank accounts. They consist of short-term investments — such as bonds and U.S. Treasury securities — that usually mature within a year. Available through investment companies, money market funds often have minimum investment amounts and aren’t as liquid as deposit accounts.
Although their yields can beat some money market accounts, money market funds may not outperform stocks, and they don’t guarantee returns. Like with money market accounts, the overall interest rate environment affects potential returns, and different funds have different yields. You may not have to pay taxes on earnings with some funds, but you’ll often pay fees that reduce your overall return.
How To Find the Best Money Market Account
Finding the money market account that best fits your needs requires the following:
- Research rates: Compare the APYs offered by various financial institutions. Look for the most competitive rates.
- Consider account features: Choose an account that provides convenient access to your funds with features such as check-writing privileges and ATM and debit card access.
- Review fees and requirements: Be aware of minimum balance requirements and costs including monthly maintenance fees and transaction fees.
- Check for FDIC or NCUA insurance: Most MMAs are covered by one of these agencies, but make sure before you open an account.
- Check for promotions: Keep an eye out for promotional offers such as sign-up bonuses or introductory APYs, which could provide additional value.
- Read customer reviews: This can help you gauge account holders’ overall satisfaction with a financial institution and its MMAs.
Alternatives to Money Market Accounts
If you’re weighing whether a money market account meets your needs, consider three other savings options: CDs and traditional and high-yield savings accounts.
Feature | Money Market Accounts | CDs | High-Yield Savings Accounts | Traditional Savings Accounts |
---|---|---|---|---|
Account Fees | May have monthly maintenance fees or transaction fees | Typically don’t have monthly maintenance fees, but early withdrawal penalties may apply | May have monthly maintenance fees | May have monthly maintenance fees |
APY | Usually variable, typically 4% to 5.3% | Usually fixed, typically higher than savings accounts and ranging from 4.5% to 5.5% | Usually variable, typically 4.5% to 5.3% | Usually variable and lower than MMAs and CDs, typically 0.01% to 0.5% |
Liquidity | High: may allow access to funds with check writing, ATMs, electronic transfers and debit cards | Low to medium: usually have early withdrawal penalties | Medium: typically allow transactions via electronic transfers | High: easy access to funds with minimal restrictions |
Minimum Opening Deposit | Varies, often ranging from $100 to $5,000 | Varies, typically ranging from $0 to $1,000 | Varies, typically ranging from $0 to $1,000 | Varies, often ranging from $0 to $500 |
Risk | Low: principal amount is typically safe due to FDIC or NCUA insurance | Low: principal amount typically safe due to FDIC or NCUA insurance, and the APY is usually fixed | Low: principal amount is typically safe due to FDIC or NCUA insurance | Low: principal amount typically safe due to FDIC or NCUA insurance |
Transaction Limits | May limit certain types of transfers each month or statement cycle | Typically don’t allow transactions until the CD matures, so early withdrawals may incur penalties | May limit certain types of transfers each month or statement cycle | May have monthly withdrawal limits, and excessive transactions may incur fees |
Money Market Rates vs. Savings Rates
The chart below uses data from the FDIC to compare the average interest rates of savings and money market accounts from 2010 to 2024. During that time, MMA rates almost always beat savings rates.
The Bottom Line: Money Market Account Rates
Money market rates can help your savings grow, so it’s important to compare the offerings at different financial institutions, as well as any fees that might cut into your earnings. For example, if your MMA earns a competitive APY but the bank charges a monthly maintenance fee or charges transaction fees for withdrawals, these expenses could affect your balance significantly.
That’s why we recommend making your decision based on more factors than an account’s rate, such as perks and balance requirements.
Recap of Our Picks for the Top Money Market Accounts
FAQ: Money Market Account Rates
Online banks tend to offer the highest money market rates right now, with some having APYs as high as 5.3%.
You can typically get up to 5% APY on a savings account through online banks and credit unions. Look for high-yield savings accounts that don’t charge monthly fees or require high minimum balances.
One downside of a money market account is that transfers and withdrawals may be limited. You might also need to make a large opening deposit or keep a high balance to get the best money market rates.
Yes, you could lose money on a money market account, but it’s relatively rare. Fees and penalties could cut into your balance if they’re higher than the interest you’ve earned. Money market accounts are considered low-risk investments because they typically have deposit insurance through the FDIC or NCUA.
Methodology
Our team has researched more than 100 of the country’s largest and most prominent financial institutions, collecting information on each provider’s account options, fees, rates, terms and customer experience. We then score each firm based on the data points and metrics that matter most to potential customers. Read our full methodology.
*Data accurate at time of publication
**Rates and promotions accurate as of June 5, 2024
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