Find out which banks offer the highest rates. Monetary market accounts (MMAS) can be an excellent place to store your money if you are looking for a relatively high interest rate with liquidity and flexibility.
Unlike traditional savings accounts, MMAs generally offer better yields and can also provide check privileges and access to the debit card. This makes these accounts ideal to have long -term savings that you want to cultivate over time, but can always access if necessary for certain purchases or invoices.
The national average interest rate for monetary market accounts is only 0.63%, according to the FDIC. However, the best monetary market account rates often pay more than 4% APY – similar to the rates offered on high -performance savings accounts.
Here is an overview of the highest monetary market account rates today:
Do you want to earn the best interest rate possible on your savings balance? Here is an overview of some of the best savings and monetary market rates available today from our verified partners.
The monetary market account rates have considerably fluctuated in recent years, largely due to variations in the target interest rate of the federal reserve, known as the rate of federal funds.
In the wake of the 2008 financial crisis, for example, interest rates were kept extremely low to stimulate the economy. The Fed has reduced the rate of federal funds to zero, which led to very low MMA levels. Meanwhile, account rates of the monetary market were generally approximately 0.10% to 0.50%, many accounts offering rates at the lower end of this range.
Finally, the Fed began to gradually increase interest rates as the economy improved. This has led to higher yields on savings products, including MMA. However, in 2020, the COVVI-19 pandemic led to a brief but clear recession, and the FED again reduced its reference rate to nearly zero to fight against economic benefits. This led to a sharp drop in MMA rates.
But from 2022, the Fed embarked on a series of aggressive interest rate increases to fight inflation. This has led to historically high deposit rates in all areas. At the end of 2023, account rates of the monetary market had increased considerably, many accounts offering 4.00% or more.
Throughout 2024, MMA’s interest rates remained high and it was possible to find accounts that paid much more than 5% APY.
Today, the rates remain high according to historical standards, although they have started a downward trajectory after the latest Fed rate drops later at the end of 2024. Today, online banks and credit cooperatives tend to offer the highest rates.
When you compare the accounts of the money market, it is important to look beyond the interest rate. Other factors, such as minimum balance requirements, withdrawal costs and limits, may have an impact on the total value you get from the account.
For example, it is common that the accounts of the money market require a significant minimum balance in order to earn the highest announced rate – up to $ 5,000 in some cases. Other accounts may charge monthly maintenance costs that can eat in your interests of interest.
However, several MMAs are available that offer competitive prices without any balance requirement, costs or other restrictions. This is why it is important to go around and compare accounts before making a decision.
In addition, make sure that the account you choose is provided by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA), which guarantees deposits up to $ 250,000 per institution, per depositor. Most accounts of the monetary market are provided by the federal government, but it is important to reveal in the rare case that the financial institution fails.
Find out more: Are the accounts of the monetary market sure?
Today, account rates of the monetary market are still quite high according to historical standards. The best accounts provide more than 4% APY, with the highest rate available today at 4.51% APY.
The amount of $ 10,000 will gain in a monetary market account depends on the percentage of annual return (APY) offered by the account, as well as the duration of your money in the account. Suppose you choose to deposit $ 10,000 in a monetary market account which earns 4% APY with monthly composition interest. After a year, you would earn $ 407.44 in interest, for a total balance of $ 10,407.44.
The accounts of the monetary market are generally safe and flexible savings options, but like any other financial product, they are also delivered with drawbacks.
For example, some MMAs require a high minimum balance to open the account or to win the announced APY. Not maintaining this minimum balance can cause penalties or reduction in interest rates. In addition, monetary market rates are variable, which means that they can change at any time at the discretion of the bank. If interest rates drop, your account will also be APY, which can make future income unpredictable compared to fixed rate products such as CDs.
