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. 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.
According to the FDIC, the national average interest rate on money market accounts is 0.64%. This may not seem like much, but consider that just two years ago this was just 0.23%, reflecting a sharp increase in a short period of time.
This is largely due to the monetary policy decisions of the Fed, which began raising its benchmark interest rate in March 2022 to combat skyrocketing inflation. In fact, the Fed raised rates eleven times. But in September, the country finally cut its benchmark interest rate, causing interest rates on deposit accounts to start falling
Still, some of the best accounts currently offer more than 5% APY. Since these interest rates may not be around for much longer, consider opening a money market account now to take advantage of today’s high interest rates.
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.
The amount of interest you can earn on a money market account depends on the annual percentage rate (APY). This is a measure of your total earnings after one year, taking into account the base rate and how often the interest is compounded (interest on money market accounts is typically compounded daily).
Let’s say you invest $1,000 in an MMA at an average interest rate of 0.64% with daily compounding. At the end of a year, your balance would rise to €1,006.42 – your initial deposit of €1,000, plus only €6.42 in interest.
Now let’s say you choose a high-yield money market account that offers a 5% APY instead. In this case, your balance will grow to €1,051.27 in the same period, including €51.27 in interest.
The more you deposit into a money market account, the more you can earn. If we take the same example of a money market account with a 5% APY, but deposit $10,000, your total balance after one year would be $10,512.67, meaning you would earn $512.67 in interest.
