Current Money Market Rates
As of today, the highest money market rate is 5.13% compared to a national average rate of 0.61%.
Here are today’s money market account rates:
- Average APY: 0.61%
- Highest Rate: 5.13%
Source: Curinos. Data accurate as of June 17, 2024. Rates are based on a $10,000 minimum deposit amount.
What Are Money Market Rates?
Money market rates are interest rates tied to a money market savings account. These rates are variable rather than fixed, so they can fluctuate and change without notice, and they may also be tiered, so higher balances yield more favorable rates. Money market interest earnings are credited as a percentage of your balance.
The rate you earn on your balance is your interest rate, while the money you make on your balance with compound interest over a year is reflected in your annual percentage yield or APY. Compound interest is the interest you earn on the interest you’ve already made.
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 depositor by the FDIC at banks, or the NCUA at credit unions. The insurance protects your balance if your bank fails.
As with other savings accounts, your money in an MMA will grow as it earns interest, and you can add or withdraw funds at any time. You may also be able to write checks or use a debit card. However, depending on the bank, you could be limited to six transactions per statement period.
Money market accounts may offer higher interest rates than typical savings accounts. In exchange, they often require higher minimum deposits and balances.
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 share similarities with both savings and checking accounts. Like savings accounts, a money market account allows you to deposit money at your convenience and earn regular interest on your balance. Both accounts are safe and liquid, with easy access to your cash and insurance on your deposit. Either account can have monthly fees, withdrawal restrictions and balance requirements to earn interest and avoid fees. However, money market accounts typically have higher fees and balance requirements.
Like checking accounts, money market accounts often offer debit cards and checks, making them more convenient than the average savings account. However, money market accounts may limit your transactions, making MMAs less than ideal for regular use.
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.
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