Editor’s note: We earn commissions from Forbes Advisor partner links. Commissions do not influence editors’ opinions or ratings.
current money market rate
The current average money market interest rate is 0.54%, but the highest interest rate can be as high as 5.13%.
Today’s money market account rates are:
- Average APY: 0.54%
- Maximum interest rate: 5.13%
Source: Kyrinos. Data is accurate as of October 6, 2023. Rates are based on a minimum deposit of $10,000.
What is the money market rate?
The money market rate is the interest rate you earn on the balance in your money market account. Rates on money market accounts are volatile, can change at any time, and are calculated as a percentage of your balance. Money market accounts often have tiered rates, with larger balances getting the best rates.
The interest rate on a money market account represents the amount of money you’ll earn on your balance, and the annual percentage yield (APY) represents the amount you’ll earn over a year if you compound interest on your balance. Compound interest is the interest you earn when interest is added to your account.
How do money market accounts work?
A money market account (MMA) is an interest-bearing savings account that you can open with a bank or credit union. These are insured by the bank’s FDIC or credit union’s NCUA for up to $250,000 per depositor. Insurance protects your balance if your bank fails.
Like any other savings account, your MMA funds grow as you earn interest, and you can add or withdraw funds at any time. You can also write a check or use a debit card. However, depending on the bank, he may be limited to 6 transactions per statement period.
Money market accounts may offer higher interest rates than regular savings accounts. Instead, they often require higher minimum deposits and balances.
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
A money market account functions in some ways like a savings account and in some ways like a checking account. Similar to a savings account, a Money His Market account allows you to deposit as much funds as you like and earn interest on your savings. Both are highly liquid and secure savings accounts, but they may have withdrawal limits, balance requirements, and monthly fees.
Like checking accounts, and unlike most savings accounts, money market accounts can use debit cards, checks, or both. Although this gives them a bit more flexibility than a regular savings account, money market accounts can have limited trading and are not intended for everyday use. Money market accounts tend to have higher fees and deposit and balance requirements.
Do money market accounts have value?
If you have the funds to meet the deposit and balance requirements and don’t want to pay hefty fees, a money market account may be worth it. If you need easy access to your money but plan to save it for the time being, a money market account is a low-risk option that earns you interest. We are also FDIC or NCUA insured.
If you can’t meet the minimum balance requirements to get the best rate, or if your money market account charges fees that deplete your earnings, it may not be worth it. If you want lower minimum requirements, consider other savings options, or if you need unlimited access to cash, consider an interest checking account.
