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Current Money Market Rates
As of today, the highest money market rate is 5.12% compared to a national average rate of 0.60%.
Here are today’s money market account rates:
- Average APY: 0.60%
- Highest Rate: 5.12%
Source: Curinos. Data accurate as of May 2, 2024. Rates are based on a $10,000 minimum deposit amount.
What Are Money Market Rates?
Money market rates are the interest rates you earn on your balance in a money market account. Rates for money market accounts are variable, meaning they are subject to change at any time and are calculated as a percentage of your balance. Often, money market accounts have tiered rates with larger balances earning the best rates.
The interest rate for a money market account represents how much money you earn on your balance, and the annual percentage yield (APY) represents how much you earn on your balance plus compound interest over the course of a year. Compound interest is the interest you earn on interest as it’s added back to your account.
How Does a Money Market Account Work?
A money market account (MMA) is a type of interest-bearing deposit account offered by banks and credit unions. MMAs at banks are insured by the FDIC, while MMAs at credit unions are insured by the NCUA. In both cases, depositors are covered for up to $250,000 per account type, protecting your money in the event of bank failure. Money market accounts work like other savings accounts in that you deposit money freely and earn interest on your balance. You can take out funds whenever you need to, but you may be restricted to six transactions per statement period.
Money market accounts typically pay higher interest rates than other deposit accounts, including traditional savings accounts. And unlike typical savings accounts, they usually offer debit cards, check-writing capabilities or both, providing convenient access to cash. Money market accounts often have higher deposit and balance requirements than many bank accounts.
How To Open a Money Market Account
Before opening a money market account, look into at least a few options with different banks. Compare minimum balance requirements, monthly fees, withdrawal limits and APYs to choose the best fit. Don’t forget to check out the conditions to earn the highest interest rates too.
You can typically apply for a money market account online or in person. You will need to provide personal information such as your name, employment status and income, address and Social Security number, as well as show a government-issued ID. Then, once you’re approved, you can make your initial deposit.
Money Market Account vs. Savings Account
Money market accounts work like savings accounts in some ways and like checking accounts in others. Similar to savings accounts, money market accounts let you deposit funds as you please and earn interest on your savings. Both are highly liquid and safe deposit accounts that may have withdrawal restrictions, balance requirements and monthly fees.
Similar to checking accounts and unlike most savings, money market accounts can come with debit cards, checks or both. This makes them a little more flexible than the typical savings account, but money market accounts may limit transactions and aren’t intended for daily use. Money market accounts also tend to have higher fees and deposit and balance requirements.
Is a Money Market Account Worth It?
A money market account is worth it if you’re looking for a safe place to keep some cash while earning interest. These are FDIC- or NCUA-insured accounts that provide convenient options for accessing your money and higher interest rates than many other deposit accounts offer. If you can meet the initial deposit requirements to open an account and maintain balance requirements to earn the best rates, a money market account may make sense for you.
But a money market account may not be worth it if you will end up paying more in fees than you earn in interest or if minimum balance requirements and transaction restrictions cause you unnecessary stress. If you need an account for everyday use, consider an interest checking account. For lower minimums, you might have better luck with a savings account.