9 Best Money Market Account Rates For January 2024 - Up to 5.30% | Bankrate (2024)

Updated January 05, 2024

Best money market accounts and rates for January 2024

Note: Annual percentage yields (APYs) shown are as of Jan. 5, 2024. Bankrate's editorial team validates this information regularly, typically biweekly. APYs may have changed since they were last updated and may vary by region for some products. Bankrate includes only FDIC banks or NCUA credit unions in its listings.

The Federal Reserve didn’t raise rates at its last meeting on Dec. 13. Even without a 12th rate increase in the current cycle, money market account rates are already at their highest levels in more than a decade. The money market account national average APY is at 0.47 percent as of Jan. 05, 2024, according to Bankrate’s most recent survey of banks. Top money market account yields – generally at FDIC-insured online banks – are more than 11 times this.

The Federal Reserve is forecasting possible rate cuts in 2024. This could mean that money market account yields could decrease a little in 2024.

However, the Fed raised rates 11 times during its current cycle – and some of the increases were 75 or 50 basis points. So top-yielding accounts should remain competitive.

Money market account yields aren’t moving higher but they will remain at very attractive levels, even as we see some pullback due to changing Fed policy.— GREG McBRIDE, CFA, BANKRATE CHIEF FINANCIAL ANALYST

How to choose a money market account

Money market accounts are a good option for achieving your savings goals. Choosing the right money market account should help you earn a competitive annual percentage yield (APY). Some of the best money market accounts allow savers to earn a high yield as well as have check-writing privileges. Follow the steps below to see if a money market account is right for you.

1. Determine what you’re saving for and when the funds will be used.
2. Research banks and credit unions. Compare accounts to find a good match. A competitive APY, check-writing capabilities and ATM access are some of the top features to look for.
3. Be aware of any minimum balance requirements and whether there are potential monthly service fees.
4. Assess whether the account comes with FDIC or NCUA insurance. Always make sure your money is within FDIC or NCUA limits and guidelines.
5. Open the money market account and make your initial deposit. Consider downloading the bank’s app, if available.

A money market account is a type of savings deposit account that can be found at banks and credit unions. Money market accounts work like a savings account, where you can deposit and withdraw money. You will also earn interest on the money you keep in a money market account.

Money market accounts generally let you withdraw money, but banks may limit withdrawals and transfers. Unlike most savings accounts, money market accounts may provide check-writing privileges. You also might have a debit card and be able to access money at an ATM. The check-writing capability of money market accounts provides a degree of flexibility and liquidity often not found in other savings accounts.

High-yielding money market accounts may pay a higher interest rate than traditional savings accounts, but their minimum deposit and balance requirements might be higher, too.

Important money market account terminology

• Check-writing privileges: A money market account may allow you to write checks against the account. This is one of the main differences between money market accounts and savings accounts. Savings accounts don’t usually offer this.
• Interest: Money that you earn for having your funds deposited with a bank.
• Compound interest: Earning interest on the previous interest you’ve earned.
• Interest rate: The percentage of your balance that is paid to you over the course of one year for having your funds on deposit. This number doesn't take into account the effects of compounding.
• Annual percentage yield (APY): Takes into account the effects of compounding during the year. The best way to compare yields is to use this number, rather than comparing interest rates. The higher the APY, the more income you’ll earn on your cash.
• Minimum balance requirement: The amount you have to keep in a savings account in order to avoid a monthly maintenance fee.

Money market accounts and compounding interest

Money market accounts typically credit interest monthly, and it’s typically paid on or about the same date each month. Compounding interest happens when your interest earns interest.

The published APY on an account includes the effects of compounding during the year. The best way to compare interest rates earned on different money market accounts is to use an apples-to-apples approach: Compare APYs and not interest rates.

Bankrate’s compound interest calculator can help you determine the potential earnings on a money market account.

How to open a money market account

Opening a money market is as easy as choosing which bank and account is right for you. Some money market accounts don’t have a minimum opening balance requirement, so you won’t have to worry about keeping a certain amount in the account or incurring a maintenance fee. Compare the top APY accounts with the minimum balance that you’re comfortable with to make the best decision for your saving needs.

Prior to opening a money market account online you’ll want to:

• Have your government-issued photo identification with you.
• Be prepared, if needed, to lift a security freeze on your credit file to open the account.
• Have your routing number and account number handy for the account you’re using to fund this new account.
• Have your social security number available.

Almost all of this information may also be needed if you open a new account in person. You may need cash or a check (or checks) to fund a new account opened in a branch.

Is a money market account safe?

Money market accounts are safe at an FDIC-insured bank or a federally insured credit union as long as they’re within limits and guidelines. FDIC deposit insurance covers up to $250,000 per depositor, per insured bank, for each account ownership category. An account at an NCUA credit union is insured up to the same amount as an FDIC bank. At both an FDIC bank and an NCUA credit union, your money that’s within limits and guidelines is protected and backed by the full faith and credit of the U.S. government should the bank or credit union fail.

To check whether a bank you're considering is FDIC-insured, you can use the FDIC’s BankFind tool. The tool may also help you realize if multiple banks use the same FDIC certificate. Always double-check with the FDIC or NCUA and your financial institutions to confirm insurance coverage.

Money market account pros and cons

Some money market accounts have certain features that you won’t find in a savings account. Here’s a look at some of thekey advantages and disadvantagesof money market accounts.

Alternatives to money market accounts

You’ll want to compare money market accounts with other accounts to make sure it’s the right place for your money.

Comparing money market accounts with savings accounts, checking accounts, CDs, NOW accounts and money market funds makes sense, since all of these are useful for different financial situations or goals.

MMAs vs. savings and checking accounts

Money market accounts are a good alternative to traditional savings accounts if you want the ability to write checks or use a debit card.

And you'll often get a better return. But if earning a high return is your priority, compare rates on high-yield savings accounts found at online banks, which may be superior to money market accounts and traditional savings accounts.

Meanwhile, money market accounts often combine the perks of paying interest and allowing some transactional features such as check-writing and debit card access. Most checking accounts are noninterest bearing, but they typically have no limits on the number of transactions each month.

Money market accounts vs. CDs

A money market account is for money that needs to be accessible. A CD is for longer-term savings that you won’t use during the CD’s term, mainly because you don’t want to incur an early withdrawal penalty fee. Since money market account yields are usually variable, a CD could give you a fixed APY to protect you from future money market account rate decreases.

Sometimes you’re rewarded with a higher APY in a CD than you would earn in a liquid money market account. Which one is better for you will depend on your financial goals.

Money market accounts vs. NOW accounts

A negotiable order of withdrawal (NOW) account is classified as a transaction account, while a money market account is a non-transaction account, according to the Federal Reserve.

NOW accounts allow for an unlimited number of third-party payments, while money market accounts are restricted to six “convenient” transfers or withdrawals per month under Regulation D. Some banks may restrict money market account transactions further.

Regular money market accounts vs. jumbo money market accounts

A jumbo money market account is likely to have a higher minimum balance requirement than a normal money market account. Generally, a jumbo deposit product requires a minimum balance of $100,000. The same minimum balance requirement is also true of many jumbo CDs.

Jumbo money market accounts aren't very common, but there are at least two institutions that offer them:

• Navy Federal Credit Union offers up to 2.25 percent APY on balances of $1 million and higher.
• Canvas Credit Union offers a jumbo money market account that requires a $100,000 minimum balance to earn the account’s top yield of 3.50 percent APY.

Money market account FAQs

Research methodology

Bankrate’s editorial team regularly updates rates featured on this page about every two weeks. We mainly look for the highest APYs and break ties using the minimum balance to open a CD. Bankrate’s editorial team hasreviewed nearly all of the banks and credit unionsthat it tracks, and researches rates weekly for more than 70 popular banks and credit unions. These institutions were selected because they offer competitive APYs, are larger (based on the amount of deposits or assets), frequently appear in internet searches or other possible factors. These banks and credit unions typically offer accounts that are available nationwide. All of these banks are insured by the Federal Deposit Insurance Corp. (FDIC) and all of the credit unions are National Credit Union Administration (NCUA) credit unions, insured by the National Credit Union Share Insurance Fund (NCUSIF). Choosing an FDIC-insured bank or NCUA-backed credit union ensures your money is safe as long it’s withininsurance limits and guidelines.

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