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Current money market rates
Today, the highest money market rate is 5.15%, compared to a national average rate of 0.61%.
Here are today’s money market account rates:
- Average APY: 0.61%
- Highest rate: 5.15%
Source: Curinos. Data accurate as of August 22, 2024. Prizes are based on a minimum amount of $10,000.
What are money market rates?
Interest on money market savings accounts is often called money market interest. This earnings is typically credited as a percentage of your savings balance on a daily or monthly basis. Money market rates change every day. Banks and credit unions that pay differentiated rates often reserve the best rates for the largest balances.
An interest rate represents the earnings that are solely on your account balance. An annual return that takes into account compound interest is called your annual percentage rate of return (APY). Compound interest is interest that accrues as you earn it.
How does a money market account work?
A money market account, or MMA, is an interest-bearing deposit account you can open at a bank or credit union. These are insured up to $250,000 per depositors by the FDIC at banks or the NCUA at credit unions. The insurance protects your balance if your bank goes bankrupt.
As with other savings accounts, your money in an MMA will grow as it earns interest, and you can add or withdraw money at any time. You may also be able to print checks or use a debit card. Depending on the bank, however, you may be limited to six transactions per accounting period.
Money market accounts can offer higher interest rates than typical savings accounts. On the other hand, they often require higher minimum deposits and balances.
How to open a money market account
Before opening a money market account, spend some time checking out what different banks offer. In addition to shopping around for the highest rates, you’ll want to compare minimum balance and deposit requirements, monthly fees, and withdrawal limits. Look for an account that offers competitive rates that you can easily qualify for.
You can typically submit an application for a money market account online or in person at a branch. The application will ask you to provide basic information, including your name, address, social security number, employment status and income. You will also likely need to present a government-issued ID. After being approved, you can make your first deposit.
Money market account vs. savings account
Money market accounts are similar in some ways to checking accounts, but most similar to savings accounts. Like savings accounts, you earn interest on your balance and can add or remove money at any time. Your balance is insured and easily accessible on both account types. Both savings and money market accounts may have monthly fees, balance requirements, and transaction limits, but money market accounts tend to have higher fees and minimum requirements.
Money market accounts are usually more flexible than savings accounts because they can offer debit card and check-writing features. This makes them somewhat like checking accounts, but unlike checking accounts, money market accounts often limit monthly transactions.
Is a money market account worth it?
A money market account is worth it if you have the funds to meet the deposit and balance requirements and you don’t have to pay a lot of fees. When you need easy access to your money, but you plan to save it for now, money market accounts are a low-risk option for earning interest. They are also FDIC or NCUA insured.
If you can’t meet the minimum balance requirements to earn the best rates, or if a money market account charges fees that will deplete your earnings, it may not be worth it. Consider other savings options if you’re looking for lower minimum requirements, or explore interest-control accounts if you need unlimited access to your cash.