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Current Money Market Interest Rates
Currently, the top money market interest rate is 5.13% and the national average rate is 0.61%.
Today’s interest rates for money market accounts are:
- Average Annual Interest Rate: 0.61%
- Highest rate: 5.13%
Source: Curinos. Data as of 12/07/2024. Prices based on minimum deposit of $10,000.
What are Money Market Interest Rates?
A money market rate is the interest rate you earn on the balance in a money market account. Money market account rates are variable, meaning they can change at any time, and are calculated as a percentage of your balance. Money market accounts often have tiered rates, with larger balances earning you the best rate.
The interest rate on a money market account represents the return you earn on your balance, while the annual percentage yield (APY) represents the return you earn on your balance in one year, plus compound interest. Compound interest is the interest you earn when the interest is credited back to your account.
How do money market accounts work?
A money market account (MMA) is an interest-bearing savings account that you can open at a bank or credit union. It’s insured by the FDIC for banks and the NCUA for credit unions up to $250,000 per depositor. This insurance protects your balance if the bank fails.
Like any other savings account, your money in an MMA grows as you earn interest, and you can add or withdraw funds at any time. You can also write checks and use debit cards, although some banks may limit you to six transactions per statement period.
Money market accounts may offer higher interest rates than typical savings accounts, but they often require higher minimum deposits and balances.
How to Open a Money Market Account
Before you open a money market account, research at least a few of the different banking options. Compare minimum balance requirements, monthly fees, withdrawal limits, and APYs to choose the best one. Don’t forget to check the terms for getting the best interest rate.
You can usually apply for a money market account online or in person. You’ll need to provide some personal information, like your name, employment status, income, address, and Social Security number, and show a government-issued ID. Then, if you’re approved, you can make your first deposit.
Money Market and Savings Accounts
Money market accounts are similar to checking accounts in some ways, but are most similar to savings accounts. Like savings accounts, you earn interest on your balance and can add or withdraw funds at any time. With both types of accounts, your balance is guaranteed and easily accessible. Both savings accounts and money market accounts have monthly fees, balance requirements, and transaction limits, but money market accounts tend to have higher fees and minimums.
Money market accounts are usually more flexible than savings accounts because they offer debit cards and check-writing capabilities. In this respect, they are similar to checking accounts, but unlike checking accounts, money market accounts often limit monthly transactions.
Are money market accounts worth it?
Money market accounts are a good choice if you’re looking for a safe place to store your cash while earning interest. These are FDIC- or NCUA-insured accounts that offer convenient options for accessing your funds and higher interest rates than many other savings accounts. If you can meet the initial deposit requirements to open an account and maintain the balance requirements to earn the best interest rates, a money market account may be right for you.
But if your fees are outweighing what you’ll earn in interest, or if the minimum balance requirements and transaction limits cause you unnecessary stress, a money market account may not be worth it. If you want an account for everyday use, consider an interest-bearing checking account. If the minimum balance is low, a savings account may be a better choice.
