With a money market account (MMA) you'll get a high interest-bearing bank account that shares some of the best features of a checking & savings account. Opening a money market account is a fast way to earn money while you are saving for shorter term goals.
Why you can trust us:
Here at The Motley Fool, we’ve been helping people grow their wealth since 1993. We're committed to providing useful, unbiased, jargon-free guidance that’s easy for people to understand and implement. And unlike many other websites, we do not allow companies to buy their way onto this page. The products you see here are what our experts believe are the best money market accounts, whether we get compensated for them or not. You can read more about our ratings methodology and our editorial integrity to learn more about us.
Show More [ + ]
Show Less [ - ]
Best money market rates for January 2024:
Current money market rates have reached over 5% APY, some of the highest we've seen in quite some time, thanks to today's rate environment. Here are our experts' top picks for the best money market accounts, ordered by highest APY:
- 5.30% APY: Vio Bank Cornerstone Money Market Savings
- 5.30% APY: American First Credit Union Money Market Deposit Account from Raisin
- 5.27% APY: Pacific Western Bank Money Market Deposit Account
- 4.75% APY: Sallie Mae Money Market
- 4.40% APY: Ally Money Market Account
- 4.20%-4.25% APY: Discover Money Market
- 3.75%-4.75% APY: EverBank Yield Pledge Money Market Account
Last updated on January 3, 2024.
Best money market accounts:
Show Best Offers Available in
Rates asof Jan 03, 2024
| Offer | APY | Minimum to Earn APY | Fees | Next Steps | |
|---|---|---|---|---|---|
Member FDIC. Rating image, 4.50 out of 5 stars. 4.50/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. Rating image, 4.50 out of 5 stars. 4.50/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | APY: 4.20%-4.25%Rate info4.20% applies to balances under $100K, Need $100,000+ to earn 4.25% | Minimum To Earn APY: $0.01-$100,000 for 4.20%; $100,000+ for 4.25% | Monthly Fee: $0 Monthly Fee: $0Min. Balance: $2,500 to open, no min balance to maintain | Min. Balance: $2,500 to open, no min balance to maintain | |
Federally insured by NCUA. Rating image, 4.75 out of 5 stars. 4.75/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. Rating image, 4.75 out of 5 stars. 4.75/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | APY: 5.30% | Minimum To Earn APY: $1 | Monthly Fee: $0 Monthly Fee: $0Min. Balance: $1 | Min. Balance: $1 | |
Member FDIC. Rating image, 4.75 out of 5 stars. 4.75/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. Rating image, 4.75 out of 5 stars. 4.75/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | APY: 5.30% | Minimum To Earn APY: $0 | Monthly Fee: $0 Monthly Fee: $0Min. Balance: $100 | Min. Balance: $100 | |
Pacific Western Bank Money Market Deposit Account Member FDIC. Rating image, 4.75 out of 5 stars. 4.75/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. Rating image, 4.75 out of 5 stars. 4.75/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | APY: 5.27% | Minimum To Earn APY: $1 | Monthly Fee: $0 Monthly Fee: $0Min. Balance: $1 | Min. Balance: $1 | |
Member FDIC. Rating image, 5.00 out of 5 stars. 5.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. Rating image, 5.00 out of 5 stars. 5.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | APY: 4.40% | Minimum To Earn APY: $1 | Monthly Fee: $0 Monthly Fee: $0Min. Balance: $0 | Min. Balance: $0 | |
Member FDIC. Rating image, 5.00 out of 5 stars. 5.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. Rating image, 5.00 out of 5 stars. 5.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | APY: 4.75% | Minimum To Earn APY: $0 | Monthly Fee: $0 Monthly Fee: $0Min. Balance: $0 | Min. Balance: $0 | |
Member FDIC. Rating image, 4.00 out of 5 stars. 4.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. Rating image, 4.00 out of 5 stars. 4.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | APY: 3.75%-4.75%Rate info4.50% is one-year promotional rate. After it expires, the following rates and deposit tiers apply: $100,000 and up: 4.15% ongoing APY$50,000 - $99,999.99: 4.05% ongoing APY$25,000 - $49,999.99: 3.75% ongoing APY$10,000 - $24,000.00: 3.75% ongoing APY$0 - $9,999.99: 3.75% ongoing APY | Minimum To Earn APY: $0 for minimum APY | Monthly Fee: $0 Monthly Fee: $0Min. Balance: $0 | Min. Balance: $0 |
Member FDIC.
A closer look at our best money market accounts:
Show The List [+]Hide The List [-]
- 4.20%-4.25% APY:Discover Money Market(Member FDIC.)
- 5.30% APY:American First Credit Union Money Market Deposit Account from Raisin(Federally insured by NCUA.)
- 5.30% APY:Vio Bank Cornerstone Money Market Savings(Member FDIC.)
- 5.27% APY:Pacific Western Bank Money Market Deposit Account(Member FDIC.)
- 4.40% APY:Ally Money Market Account(Member FDIC.)
- 4.75% APY:Sallie Mae Money Market(Member FDIC.)
- 3.75%-4.75% APY:EverBank Yield Pledge Money Market Account(Member FDIC.)
Show Best Offers Available in
Rates asof Jan 03, 2024
Discover Money Market
Member FDIC.
Rating image, 4.50 out of 5 stars.
4.50/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.50 out of 5 stars.
4.50/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Monthly Fee
$0
Min. Balance
$2,500 to open, no min balance to maintain
APY
4.20%-4.25%Rate info4.20% applies to balances under $100K, Need $100,000+ to earn 4.25%
Min. To Earn APY
$0.01-$100,000 for 4.20%; $100,000+ for 4.25%
- Competitive APY
- No minimum balance to maintain account
- No monthly fee
- Debit card and check availability
- FDIC insured
- Required balance to open is a little high
- Best rate requires at least $100,000
- No in-person banking/branches
This account offers a competitive APY, especially given there are no monthly service fees, while still giving access to ATMs and checks. The minimum balance to open the account may be a little high for some folks, but you don't need to maintain a high balance to earn a good rate.
American First Credit Union Money Market Deposit Account from Raisin
Federally insured by NCUA.
Rating image, 4.75 out of 5 stars.
4.75/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.75 out of 5 stars.
4.75/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Monthly Fee
$0
Min. Balance
$1
APY
5.30%
Min. To Earn APY
$1
- High APY
- No account fees
- An unlimited number of deposits and withdrawals
- NCUA insured
- Deposits and withdrawals can only be conducted via ACH transfer to/from an external bank account (limit to one linked external account)
- No checking accounts offered through Raisin
- Limited customer service hours
- Cannot link Raisin accounts to third-party apps (e.g. personal budgeting apps)
- No branch access; online only
American First Credit Union is a 70-year old credit union with nearly $1 billion in assets and insurance from the NCUA. The American First Credit Union powered by Raisin could be a great choice if you're looking for a high APY savings product. It offers a higher APY than you'd get when opening an account directly through the credit union, plus you get access to Raisin's savings marketplace and easy account management. On the other hand, accounts through Raisin do not offer branch access and limit you to using one account to transfer money in and out of the money market account.
Vio Bank Cornerstone Money Market Savings
Member FDIC.
Rating image, 4.75 out of 5 stars.
4.75/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.75 out of 5 stars.
4.75/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
- Competitive interest rates
- No monthly fee with electronic statements
- Low minimum
- No debit card or check-writing privileges
- No physical branches
- No ATM network
Vio Bank is the online bank division of MidFirst Bank, the largest privately held bank in the United States and an FDIC member. It offers a competitive rate for its Money Market Savings Account and no monthly fees as long as you agree to electronic statements. There is a $100 minimum deposit with this account and it is FDIC insured.
The online bank has no physical branches and no ATM network. This makes accessing cash on the go a little more difficult. The online bank does not offer a checking account so you are limited to only a few products in its lineup.
Pacific Western Bank Money Market Deposit Account
Member FDIC.
Rating image, 4.75 out of 5 stars.
4.75/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.75 out of 5 stars.
4.75/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
- High APY
- No account fees
- An unlimited number of deposits and withdrawals
- FDIC insured
- Deposits and withdrawals can only be conducted via ACH transfer to/from an external bank account (limit to one linked external account)
- No checking accounts offered through Raisin
- Limited customer service hours
- Cannot link Raisin accounts to third-party apps (e.g. personal budgeting apps)
- No branch access; online only
The Pacific Western Bank Money Market Deposit Account powered by Raisin is a high-yield money market account that deposits your money with PacWest Bank, but is managed through the Raisin platform. By opening this account through Raisin, you get the advantage of a higher APY than you'd receive by opening the account directly with PacWest. You get access to Raisin's simple online management interface and savings-product marketplace. However, you do give up the option to bank at PacWest branches and have less flexibility in how you transfer your money in and out of the account.
2023 Award Winner
Ally Money Market Account
Member FDIC.
Rating image, 5.00 out of 5 stars.
5.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 5.00 out of 5 stars.
5.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
- FDIC insured
- No monthly fee
- ATM access
- Checking privileges
- No cash deposits
- No branches
Ally's banking approach carries over to its money market account with a high APY and a focus on cutting routine account fees to $0, including monthly maintenance. What's more, there are no minimum balance requirements.
Sallie Mae Money Market
Member FDIC.
Rating image, 5.00 out of 5 stars.
5.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 5.00 out of 5 stars.
5.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
- FDIC insured
- Competitive APY
- No minimum balance
- No debit card
Sallie Mae Bank's money market account can grow your money at a competitive rate with no minimum deposits or fees. You can access savings through checks and electronically deposit funds into your account.
EverBank Yield Pledge Money Market Account
Member FDIC.
Rating image, 4.00 out of 5 stars.
4.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Rating image, 4.00 out of 5 stars.
4.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Monthly Fee
$0
Min. Balance
$0
APY
3.75%-4.75%Rate info4.50% is one-year promotional rate. After it expires, the following rates and deposit tiers apply: $100,000 and up: 4.15% ongoing APY$50,000 - $99,999.99: 4.05% ongoing APY$25,000 - $49,999.99: 3.75% ongoing APY$10,000 - $24,000.00: 3.75% ongoing APY$0 - $9,999.99: 3.75% ongoing APY
Min. To Earn APY
$0 for minimum APY
- Great intro APY
- No minimum to open/maintain account
- Debit card and check writing
- FDIC insured
- Standard APY is much lower than intro rate
- Minimum balance for ATM reimbursem*nt
This account is a strong option for folks who have short-term savings needs. The introductory APY is competitive, but it only lasts for the first year. After that, rates drop significantly, so it isn't recommended for long-term savings.
Our Methodology
Our Ratings Methodology for Selecting the Best MMAs:
We put the most weight on what's most important to you: the APY. The higher the APY, the more money you earn. That's a win.
- But it's not just about the APY. Many banks have a minimum amount you need to open a money market account, and some have a separate amount that you need to keep in your account to continue to earn the highest APY. We deduct points from banks that set higher minimum balance requirements. Why? Because higher minimums mean you need to keep more tied up to continue to earn and that reduces the flexibility of your money.
- On the other side of that coin, we add points to banks who have features like ATM access and, in some cases, even paying your ATM fees. That increases the flexibility of your money.
- Finally, we adjust points based on other factors, including the brand and behavior of the banks behind the money market accounts. We boost banks that make your life easier, and dock points from banks that do the opposite. We look at:
- Whether the brand has FDIC insurance: If you have less than $250,000 in your account and the account is FDIC insured, your money is safe even if the bank goes belly up (thank you, FDIC!).
- How easily you can access your money
- Whether the brand has top-notch customer service
- Whether they act like they have a highly valuable brand to protect. If they are more apt to do things like quietly cut APYs, or not notify current clients of better deals, we'll deduct points.
What is a money market account?
A money market account is a deposit account that shares some checking and savings accounts features. Most banks offer this account type. Money market interest rates are comparable to those found with savings accounts, with the best money market rates around 0.50% APY or higher.
Unlike most savings accounts, money market accounts often come with checks and debit cards for direct fund withdrawal.
How to choose the best money market account
If you're interested in opening a money market account, you'll want to be sure to choose the right one. Here's what you should look for:
- FDIC insurance: This protects your money in case your bank goes under. Most money market accounts are FDIC insured, so your money is protected up to $250,000 per person per bank in case of bank failure.
- High APY: Look for an annual percentage yield (APY) that's close to the highest money market interest rates, but don't worry about choosing the highest-yield money market account. Banks change their rates and the best options can shift over time.
- Debit card: Some accounts include a debit card in case you'd like to withdraw cash directly or use your money market account funds to buy things.
- Check-writing capabilities: Some money market accounts come with check-writing capabilities instead of or in addition to a debit card. Look for an account that has this if you want to write checks directly from the account.
- Branch locations: If you prefer to bank in person, open a money market account at a bank that has branches near you. Withdrawing funds from your money market account in person does not count toward your monthly withdrawal limits, so it's a way to take out more money without incurring extra fees. If you don't expect to bank in-person, consider looking at online money market accounts in addition to money market accounts at brick-and-mortar banks.
- ATM locations: If your money market account has a debit card, check where your nearest fee-free ATMs are and whether your bank charges fees for using an out-of-network ATM. The best banks may reimburse you for some out-of-network ATM fees each month.
- Balance requirements: Check if your bank has a minimum initial deposit requirement or ongoing balance requirements, and if so, make sure you are able to meet them.
Who should open a money market account?
It could be a good idea to open a money market account if you:
- Want to earn interest on your savings
- Want convenient withdrawals from your bank account (withdrawing from a savings account can be a bit of a hassle)
The best money market rates allow you to earn money on your money. They also sidestep the biggest problem of a savings account: With a savings account, you cannot usually withdraw funds directly. Instead, you have to transfer funds to a checking account first. Money market accounts, on the other hand, let you take out cash directly. Money market accounts also generally offer a debit card or checks (and some accounts offer both).
They're not a great replacement for a checking account, unless you rarely withdraw funds. But a money market account could replace your savings account if you wanted it to. Both money market accounts and savings accounts are subject to Regulation D, which limits you to six withdrawals per month and charges you extra for exceeding these limits. In response to the pandemic, the government waived this rule in 2020, but individual banks still restrict the number of monthly transactions you can make.
Money market terms to know
Here are some common terms used when discussing money market accounts and rates:
- Annual percentage yield (APY): The APY is an annualized representation of the account's interest rate. APY stands for "annual percentage yield." People often use this term interchangeably with interest rate, but the two aren't the same. APY takes into account the actual interest rate as well as how often that interest compounds. Look for the highest APY to find the highest money market rates (which means more interest for you). Note APYs on money market accounts are subject to change at any time; money market rates today may not be the same tomorrow.
- Minimum balance: Some money market accounts require a minimum deposit to open the account or to avoid monthly maintenance fees. These minimum balance requirements can be higher than the requirements for savings accounts.
- Transaction limits: Money market accounts may be subject to restrictions on the number of convenient withdrawals you can make without incurring additional fees. Convenient withdrawals include electronic transfers, most check withdrawals, and online bill pay, but do not include things like withdrawals made at a branch location or cash taken out at an ATM.
Whether you just want an account to stash your nest egg or you're searching for the best jumbo money market rates, these three terms are important to know.
Alternatives to money market accounts
If you don't think a money market account is a good fit for you, here are some other options worth considering.
Money market accounts vs. savings accounts
A savings account is another type of deposit account that offers a similar APY to a money market account but has more restrictions on accessing funds. You're limited to six savings account withdrawals per month if you'd like to avoid fees, and most savings accounts lack check-writing capabilities or debit cards.
But the best savings accounts tend to have lower minimum balance requirements than money market accounts, and some may not have minimum balance requirements at all.
Read more: Savings Accounts vs. Money Market Accounts
High-yield savings account comparison
We recommend comparing high-yield savings account options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of standout accounts.
Show Best Offers Available in
| Account | APY | Promotion | Next Steps |
|---|---|---|---|
Member FDIC. Rating image, 4.00 out of 5 stars. 4.00/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | 5.25% Rate infoTo ensure you keep getting the highest rate at UFB, you'll need to keep an eye on their rates. Occasionally, the bank launches new accounts with higher rates. Existing accounts need to contact the bank to request being moved to one of these new accounts.Min. to earn: $0 | N/A | |
Member FDIC. Rating image, 4.75 out of 5 stars. 4.75/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | up to 4.60% Rate infoYou can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.Min. to earn: $0 | New customers can earn up to a $300 bonus with qualifying direct deposits! | |
Member FDIC. Rating image, 4.75 out of 5 stars. 4.75/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | 5.05% APY for balances of $5,000 or more Rate info5.05% APY for balances of $5,000 or more; otherwise, 0.25% APYMin. to earn: $100 to open account, $5,000 for max APY | N/A |
Money market accounts vs. certificates of deposit (CDs)
A CD is another type of deposit account (CD stands for "certificate of deposit"). These can have APYs comparable to or even higher than money market account rates. In exchange for these higher rates, you have to pay a penalty if you withdraw your funds before the full length of the CD term.
CD terms can range from a month to 10 years, with most falling in the six-month to five-year range. They can be a great place for savings you don't intend to use anytime soon, but you have to consider what interest rates are doing. CD rates are typically locked in for the full term length, which is great when rates are dropping but bad when they are climbing.
Read more: CDs vs. Money Market Accounts
Outside Experts Weigh In On MMAs
Dr. Nonna Sorokina, Ph.D.
A.P. at Penn State University
Dr. Nonna Sorokina is a passionate teacher/scholar in the finance and quantitative fields and is an Assistant Professor at Penn State University. Prior to joining Penn State, Dr. Sorokina taught at Kent State University, Wake Forest University, and TCNJ.
What are some of the potential positives and/or negatives associated with a money market account?
A money market account does generate return and provides a flexibility of on-demand withdrawal. Money market accounts would have limited transactional functionality compared to a good checking account. It may have a significant minimum balance limit or restrict the number of transactions in a given period of time.
How can money market accounts fit into someone’s financial account makeup?
Money market accounts typically pay greater interest but offer less flexibility. Thus, one has a checking account for day-to-day transactional purposes, savings account for setting money aside, and a money market account for a short-term liquid investment of savings, when a purchase of an investment asset for longer-term is not feasible.
FAQs
A money market account is a deposit account that shares some checking and savings accounts features. Most banks offer this account type. Money market interest rates are comparable to those found with savings accounts.
The best money market accounts have high APYs and give you multiple ways to access your funds when you need them. They're also FDIC insured and have affordable minimum balance requirements.
A good interest rate for a money market account is 1.00% APY or higher, though this can fluctuate over time.
Money market accounts work similarly to other types of banking deposit accounts.
When you deposit money into your money market account, your bank or credit union will pay you interest on the total money in your account, just like high-yield savings accounts.
How often do money market accounts pay interst?
Typically, your money market account will pay you interest on the funds in your account monthly, but the interest normally compounds daily. So, the more you contribute, and leave in your account, the more interest you will earn!Money kept in money market accounts is accessible when you need it, without incurring a withdrawal penalty, as you might with a certificate of deposit.Money market accounts also allow you to withdraw your money like a checking account, mostly without withdrawal fees; but there may be slightly less access access to your money on a monthly basis. Money market accounts can also include options such as debit cards and check-writing capabilities, similar to checking accounts.
Money market accounts pay a slightly higher interest rate than traditional savings accounts, and sometimes even high-yield savings accounts, because of where the banks or credit unions are allowed to invest the money you deposit.
With money market accounts, your financial institution is allowed to invest your money in short-term, highly liquid, low-risk securities like certificates of deposit (CDs), government bonds/securities, commercial paper, or other similar investments.
Then, when those assets the invested in mature (reach their term length for payout), they give a portion of that money back to you, as a money market account holder.
This investment strategy is not available to financial institutions if you put your money in just a traditional savings account.
In most cases, you can't lose money with a money market account. Money market accounts are treated like regular savings accounts at both banks and credit unions. And like a savings account, a money market account is often insured by the Federal Deposit Insurance Corporation (FDIC) when it's in a bank, and insured by the National Credit Union Administration (NCUA) when it's in a credit union. These cover up to $250,000 per person per bank in case of bank failure.
Typically, the interest you earn on the funds in your money market account compound daily, and are paid out to you monthly.
What does compounding interest mean? It means the more money you add, the more money you will earn. Interest can compound yearly, monthly or daily, depending on your account type. So, if you have daily compounding (like most MMA accounts), you will earn more money on your account if you make more frequent deposits, and the higher your balance is in your money market account, the more interest you will earn!
The interest rates on money market accounts are variable. The rate of interest rises and falls over time, impacted by inflation.
Depending on the financial institution, a money market account may come with both a debit card and check-writing privileges. If that's important to you, make sure the bank or credit union you're working with grants those privileges.
Our Banking Experts
Writer, Analyst
Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice for The Ascent and its parent company The Motley Fool, with more than 4,500 published articles and a 2017 SABEW Best in Business award. Matt writes a weekly investment column ("Ask a Fool") that is syndicated in USA Today, and his work has been regularly featured on CNBC, Fox Business, MSN Money, and many other major outlets. He’s a graduate of the University of South Carolina and Nova Southeastern University, and holds a graduate certificate in financial planning from Florida State University.
By:Kailey Hagen
Writer
Kailey Hagen has been writing about small businesses and finance for almost 10 years, with her work appearing on USA Today, CNN Money, Fox Business, and MSN Money. She specializes in personal and business bank accounts and software for small to medium-size businesses. She lives on what's almost a farm in northern Wisconsin with her husband and three dogs.
Fact CheckedNathan Alderman
Fact checker
Nathan Alderman has worked with The Motley Fool since 2005, making errors his arch-enemies in a variety of roles including a six-year stint as the dedicated fact-checker for The Motley Fool's premium newsletter services. As The Ascent's Compliance Lead, he makes sure that all the site's information is accurate and up to date, which ensures we always steer readers right and keeps various financial partners happy. A graduate of Northwestern University's Medill School of Journalism, Nathan spends his spare time volunteering for civic causes, writing and podcasting for fun, adoring his wife, and wrangling his two very large young children.
