The Federal Reserve has cut the federal funds rate three times in 2024 for a total reduction of one percentage point. As a result, interest rates on deposits – including money market rates – are falling.
It’s more important than ever to compare MMA rates and make sure you’re getting the most you can on your balance.
Although money market rates are elevated by historical standards, the national average rate for MMAs is just 0.66%, according to the FDIC. The good news: Top high-yield money market accounts offer more than 5% APY — more than seven times the national average.
That’s why it’s important to do some research before opening an account on the money market. Interest rates vary widely, but there are several banks (in particular, 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 top 10 money market accounts available>>
In addition, the table below shows some of the best savings rates and money accounts available today from our trusted partners.
Online banks operate exclusively through the web. This significantly reduces their overhead costs, so they can pass these savings on to clients in the form of high deposit rates and low fees. If you are looking for the best money market account rates, online banks are a great place to start.
However, online banks aren’t the only place you can find savings accounts with 4% to 5% APY rates. Credit unions are non-profit financial cooperatives, and are known for competitive prices and lower fees. Many credit unions have certain requirements that must be met in order to become members, although there are some that allow almost anyone to join.
Read more: Are online banks really safe?
Money market accounts can be a great option for short-term savings goals, such as building an emergency fund or putting money away for upcoming expenses. They generally offer higher interest rates than regular savings accounts and provide easier access to your money compared to some other options like certificates of deposit (CDs).
Money market accounts are also considered low risk and are insured by the FDIC up to a standard $250,000 per depositor, per institution. This makes them safer than money market fundswhich may be subject to market risk.
However, keep in mind that many money market accounts require a minimum balance to open the account and earn at the highest advertised rate. If you can’t maintain this balance, you could pay fees or miss out on the best prices.
Although you can generally access your funds as needed, MMAs may limit the number of transactions you can make each month. If you need frequent 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 a regular savings account without locking money in a CD.
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You can maintain a minimum balance to avoid fees.
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You want to keep funds readily available for emergencies or short-term expenses.
