Between March 2022 and July 2023, the Federal Reserve raised interest rates eleven times. As a result, interest rates on money market accounts (MMA) rose sharply.
However, the Fed cut the fed funds rate by 50 basis points in September and another 25 basis points in November. Deposit rates – including interest rates on money market accounts – have therefore started to decline. It’s more important than ever to compare MMA rates and make sure you’re earning as much as possible on your balance.
Although interest rates on money market accounts are high by historical standards, the national average rate for MMAs is just 0.60%, according to the FDIC. The good news: The best high-yield money market accounts offer an APY of over 5% – more than seven times the national average.
That’s why it’s important to shop around before opening a money market account. Interest rates vary widely, but there are several banks (particularly online banks) and credit unions with very competitive offers.
Here’s a look at some of the best MMA rates available today:
Check out our picks for the 10 best money market accounts available today >>
Additionally, the table below contains some of the best savings and money market account rates currently available from our verified partners.
Online banks operate exclusively via the Internet. This significantly reduces their overhead costs so they can pass these savings on to customers in the form of high deposit rates and low fees. If you’re looking for the best rates on money market accounts, online banks are a good place to start.
That said, online banks aren’t the only places you can find savings accounts with rates of 4% to 5% APY. Credit unions are not-for-profit financial cooperatives and are also known for offering competitive rates and fewer fees. Many credit unions have certain requirements that must be met in order to join, although there are some that allow just about anyone to join.
Read more: Are online banks really safe?
Money market accounts can be a good option for short-term savings goals, such as building an emergency fund or putting money aside for future expenses. They generally offer higher interest rates than regular savings accounts, and they provide easier access to your money compared to some other options such as certificates of deposit (CDs).
Money market accounts are also considered low risk and are FDIC insured up to the standard $250,000 per depositor, per institution. This makes them safer than money market funds, which can be subject to market risk.
However, keep in mind that many money market accounts require a minimum balance to open the account and earn the highest advertised rate. If you can’t maintain this balance, you could be charged fees or miss out on the best rates.
And while you can generally access your money when needed, MMAs can limit the number of transactions you can make each month. If you need regular access to your money, this may be a consideration.
Read more: Is there a penalty for withdrawing from your money market account?
When a money market account makes sense:
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You want to earn more interest than on a regular savings account, without putting your money in a CD.
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You can maintain the minimum balance to avoid fees.
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You want to keep the money easily accessible for emergencies or short-term expenses.
