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current money market rate
The current average money market interest rate is 0.56%, but the highest interest rate can be as high as 5.13%.
Today’s money market account rates are:
- Average APY: 0.56%
- Maximum interest rate: 5.13%
Source: Kyrinos. Data is accurate as of January 3, 2024. Rates are based on a minimum deposit of $10,000.
What is the money market rate?
The interest rate on a money market savings account is often referred to as the money market rate. These earnings are typically deposited as a percentage of your savings balance on a daily or monthly basis. Money market rates change daily. Banks and credit unions that pay tiered interest rates often reserve the best interest rate for their largest balances.
Interest rate represents the income you earn from your account balance alone. The annual rate of return that takes into account compound interest is called the annual percentage yield (APY). Compound interest means that you earn interest every time you earn interest.
How do money market accounts work?
A money market account (MMA) is a type of interest-bearing savings account offered by banks and credit unions. Banks’ MMAs are insured by the FDIC, and credit unions’ MMAs are insured by the NCUA. In either case, depositors are covered up to $250,000 per account type, protecting your money in the event of a bank failure. Money market accounts work like other savings accounts in that you are free to deposit money and earn interest on your balance. He can withdraw funds whenever he wants, but he may be limited to 6 transactions per statement period.
Money market accounts typically pay higher interest rates than other savings accounts, including traditional savings accounts. And unlike typical savings accounts, they typically offer debit cards, check transfer capabilities, or both, giving you 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, consider at least a few options at different banks. Compare minimum balance requirements, monthly fees, withdrawal limits, and APY to choose the best one. Don’t forget to check the conditions to get the highest interest rate.
You can usually apply for a money market account online or in person. You must provide personal information such as name, employment status, income, address, social security number, and provide government-issued identification. Then, once approved, you can make your first deposit.
Money market accounts and savings accounts
Money market accounts have similarities to both savings and checking accounts. Similar to a savings account, a Money He Market account allows you to deposit money at your convenience and earn regular interest on your balance. Both accounts are safe, liquid, and offer insurance and easy access to your cash and savings. Both accounts can have monthly fees, withdrawal limits, 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 checking, making them more convenient than your average savings account. However, MMA is not ideal for regular use as your money market account may limit your trading.
Do money market accounts have value?
If you want to save money now, but want easy access to cash later, a money market account is worth it. This account is FDIC or NCUA insured and will never lose value, making it a safe option for storing your money. Having a money market account is fine as long as you meet the deposit and balance requirements to avoid fees and earn interest.
If you can’t meet the requirements to get the best rate, or if your money market account charges fees that exceed your earnings, MMA may not be worth it. Consider other savings accounts if you have a low balance, or an interest-bearing checking account if you need to access your funds frequently.