Due to the current rise in interest rates, now is a great time to open and maintain a money market account (MMA). Traditionally, many individuals opened savings accounts to take advantage of conventionally high interest rates. However, money market accounts have increased in popularity due to the following reasons:
- Most money market accounts let you write checks
- Most money market accounts provide a debit card for store or online purchases
- Many money market accounts have easy online management systems or smartphone apps
In this way, a money market account combines the qualities of the best online savings account and checking accounts avaible. This flexibility makes getting a money market account a top choice for managing money in the modern era.
Tips for Choosing the Best Money Market Account Rates
Because money market accounts tend to have lower interest rates than traditional savings accounts, you should actively look for a money market account that pays a high yield but charges low fees. To protect your money, any account should also be FDIC-insured.
Look for accounts that insure up to $250,000 per depositor and permit withdrawals if you need to make them. (Federal regulations allow up to six withdrawals from a money market account each month.) A review of the top 10 best money market account rates in the industry can help you make an informed decision about managing your income.
1. All America Bank
All America Bank is a great institution for individuals who do not have a lot of cash to spare. In fact, you can start a brand-new money market account with a minimum deposit of only $50. Even better, the bank does not have a minimum daily balance policy, and it does not charge any monthly banking fees. Because the All America Bank caters to people who do not have a lot of money to deposit, it is one of the most popular options for beginners.
This lower-balance friendly institution provides a high average percentage yield (APY) of 2.00% on any balance less than $50,000. (The APY for balances over $50,000 actually decreases to 0.50%, meaning that this account is best for smaller balances.) Upon starting an account, you will receive a Visa debit card, free online banking, and online statement access. You can make up to six withdrawals each month free of charge (All America Bank charges a $5 fee for any extra withdrawals).
2. Capital One 360
Although this institution is famous for conventional banking, Capital One Financial Corporation offers more than checking accounts and credit cards. The corporation also offers a great money market account rate for individuals who are ready to save.
This Capital One 360 money market has a current APY of 2.00%. There is no minimum deposit required to start the account and no monthly maintenance fees. However, you do need to keep a daily minimum balance of $10,000 to maintain this great APY. Balances that fall below $10,000 earn a much lower APY at 0.85%. If you do not have a lot of money to save, it may be best to look into an alternative.
This savings-friendly account also offers two great digital tools to help you meet your goals. The Capital One 360 Automatic Savings Plan lets you instantly deposit money into your MMA each month to maintain a high balance and APY. Similarly, the My Savings Goal Tool sets alerts in real-time for savings milestones. Although the Capital One 360 MMA does not offer check writing, you do receive an ATM card with which you can withdraw up to $1,000 per day. While federal law limits direct withdrawals and transfers to six transactions per month, you have unlimited use of this ATM card. Use your online Capital One 360 account or mobile app to review and manage your withdrawals and savings.
3. CIT Bank
CIT Bank allows you to open a new money market account for only $100, and this account has zero maintenance fees. In addition to the affordable opening balance, CIT Bank raised its interest rate from 1.75% to 1.85% in May 2018. As an internet-only bank, CIT is flexible enough to allow members to open a second, conventional savings account with an APY of 1.55%.
With no restrictions, any CIT Bank member can benefit from opening both a new money market account and a conventional savings account. Finally, CIT Bank also has a premium account known as the Savings Builder account. This premium account has an APY of 2.15-2.25%. To qualify for the Savings Builder program, you must make a minimum monthly deposit of $100 OR maintain a minimum daily balance of $25,000.
4. Liberty Bank
Liberty Bank is a regional institution that offers a Max Money Market account program to customers in Connecticut, Rhode Island, and Massachusetts. This bank requires a minimum $500 deposit, and every account earns 2.00% APY on daily balances under $100,000. With this very wide range ($500-$100,000), you can save as much or as little as you need to while still earning a great interest rate.
As a Liberty Bank customer, you can manage many aspects of your MMA account either online or by phone. In addition, you can use the Liberty ATM card at any ATM machine marked with a Cirrus, MasterCard, or NYCE logo. Customers can deposit money into an Liberty MMA from virtually any source. However, keep in mind that individuals with existing Liberty accounts cannot currently transfer money from other account numbers within the same bank.
5. Northpointe Bank
Northpointe Bank offers high-rate money market accounts that include check-writing capabilities and unlimited debit cards for account members. You will need $1,000 to open the account and a minimum daily balance of $25,000 to earn a strong APY of 2.30%. While some money market accounts lower this interest rate once you reach a balance of five or six figures,
Northpointe allows you to earn the same high APY until your account exceeds $1 million. Therefore, this account is an excellent way for most people to earn a substantial profit without suffering penalties for maintaining a high balance. In addition, Northpointe does not charge any monthly maintenance fees, so you can leave you funds in the account as long as you wish without incurring charges.
It is important to note that Northpointe Bank adheres strictly to the federal rule of six transactions or transfers each month. If you exceed this number, expect to pay a service fee of $15 for each additional transaction. You can manage your transactions and earnings using online banking or the Northpointe mobile app.
6. Pacific National Bank
Despite a name that suggests West Coast origins, Pacific National Bank is a Miami-based financial institution that originally supported international banking. This bank received a U.S. national bank charter in 1985 and has served Miami residents for over two decades. In 2016, however, Pacific National Bank officially opened its services to any U.S. citizen with a valid social security number.
As a result, individuals nationwide can get a money market account with a stellar APY of 2.25% with a minimum initial deposit of $5,000. To retain this high rate, you will need to maintain the $5,000 balance or higher (or pay a monthly maintenance fee of $25). You can also write checks or make ACH transfers without any additional fees. Keep in mind that Pacific National Bank adheres to the federal regulation of limiting direct withdrawals or transfers to six transactions per month. You can monitor all activity using the Pacific mobile app or online banking service.
7. Sallie Mae
Although most people associate Sallie Mae with student loans, the company has recently become a viable option for money market accounts. Between October 2018 and December 2018, Sallie Mae increased the APY on money market accounts from 1.90% to 2.20%. There are no minimum balance requirements or tier levels to benefit from this high APY, and you can open a Sallie Mae MMA using any deposit amount.
This interest rate compounds daily and pays monthly, and the account currently charges no monthly maintenance fees. With the Sallie Mae MMA, you can also write checks and make up to six withdrawals each month if necessary. (Any additional withdrawals cost $10 per transaction.) Keep in mind that Sallie Mae reserves the right to close accounts that display 12 months of inactivity and balances less than $100 for the same period.
If you currently have a Sallie Mae student loan, this money market account may be a great option for strengthening your finances. For one, Sallie Mae waives the 12-month inactivity rule for any person who currently has a student loan. In addition, you can use your Sallie Mae MMA to make payments on your Sallie Mae student loan - without any of these payments counting toward your monthly withdrawal limit.
This ability to make student loan payments while keeping access to up to six withdrawals each month makes this account a sure bet for anyone on a budget or wrapping up student loans. You can fund this money market account with electronic transfers from your existing checking account and monitor all account activity online.
8. TIAA Bank
TIAA Bank is the product of a merger between two financial services companies: TIAA Direct and EverBank. To celebrate this successful merger, the newfound TIAA Bank now offers the Yield Pledge money market account. The Yield Pledge features a first-year introductory rate of 2.15% when you make a minimum opening deposit of $5,000. After the first year, TIAA Bank may adjust your APY rate based on your daily account balance. Despite the potentially variable APY, TIAA Bank "pledges" that your rate will never fall below 1.00% (even if you have an extremely low account balance).
Moreover, TIAA Bank ensures that will always maintain competitive industry yields (meaning that yields remain within 5% of those offered from other banks). The Yield Pledge money market account does not charge any monthly maintenance fees, and you can access all account activity using an online browser or mobile app. Once you open a TIAA Bank money market account, you will also receive a Visa debit card for ATM machine access or purchases.
9. Premier Members Credit Union
Make a difference in the community and earn a great interest rate on smaller deposits with the Premier Members Credit Union money market account. The credit union offers an extremely high APY of 4.00% to any individual who makes a minimum $5.00 charitable contribution to Impact on Education, a non-profit that benefits Colorado's Boulder Valley School District.
Premier offers this stellar program to nationwide users, and it only costs a $5.00 minimum deposit to open the account. This means that for a total of $10 (or $5 for the charity and $5 for the deposit), you can start earning one of the highest rates in the history of MMAs.
Because Premier continues to pay this high interest rates on balances up to $2,000, this is a great account to own if you do not have a lot of cash. Once the balance exceeds $2,000, Premier allows you to earn 1.49% APY on the account until it exceeds $5,000. Any accounts above $5,000 operate on a tiered APY system that decreases based on the size of the account balance. Premier also allows you to write checks and make up to six withdrawals every month. If you need to make more than six withdrawals, the credit union charges a $10 fee for each additional transaction.
10. UFB Direct
The UFB Direct Money Market Account is a great way to organize your finances. It provides a 1.60% APY regardless of balance size, and you can also receive a free Visa debit card upon request. In addition to its flexibility (no minimum deposit and no minimum balance required), the UFB account does not charge any monthly maintenance fees. You can manage your account using UFB online banking or the award-winning mobile app.
UFB Direct is perhaps most famous for its extensive check-writing capabilities. For example, you can use the mobile checking for automatic online bill pay or to deposit checks instantly from your smartphone. Simply upload your check using the mobile app, and the funds should be available in your MMA within a few business days.
You can also make up to six monthly transfers between your money market account and any type of external checking. If you need to write paper checks, you can deduct the respective amount from your money market account balance. As an added bank bonus, UFB Direct provides its members with free postage-paid envelopes with which to mail paper checks.
If you would like the ability to earn interest on an account but maintain access to your funds when necessary, a money market account may be right for you. A money market account with a high interest rate can help you get the best return on storing your money in an account from which you can withdraw as needed.
A money market account is a savings account that many people are considering opening today. This section helps to answer some frequently asked questions pertaining to money market accounts and money market funds.
General Money Market
In this section you will find common money market frequently asked questions pertaining to explanations of a money market account and how it all works.
What is a money market account?
A money market account is a traditional savings accounts that contain higher interest rates that offers checks or debit cards. These types of accounts tend to require a higher minimum deposit and a higher balance.
What is money market?
A money market is a market where financial instruments are used to trade high liquidity and short maturities. It is often used for borrowing and lending in the short term.
How does a money market account work?
A money market account works in the same way as other savings accounts except you are given more options when it comes to accessing your funds such as using checks or access to a debit card.
What is a money market savings account?
A money market savings account is a savings account given by a bank that offers better features than most savings accounts. The difference with a money market savings account is that you must pay higher interest rates in order to benefit from these features.
Which of the following is not a money market instrument?
Out of the options of treasury bill, negotiable certificate of deposit, commercial paper, treasure bond and Eurodollar accounts, the one that is not a money market instrument is a treasury bond.
What is a money market settlement fund?
A money market settlement fund is a fund that is opened with a zero balance and is an account that is primarily used to pay and receive payments from proceeds of various trades that you make.
What are the advantages of a money market account?
The advantages of using a money market account are:
- These accounts pay higher interest rates than other types of bank accounts.
- These accounts are insured by the FDIC for up to $250,000 per account.
- Users can access their money via ATM’s, transfers or the use of checks.
What is money market instruments?
Money market instruments are debt securities that are given to the owner of the account in order to receive a stated and fixed sum of money by a specified date. These instruments are typically traded at a discount in organized markets. Read more about other types of investments and how to buy stocks online without a broker.
What is a money market deposit account?
A money market deposit account is a savings account with high yield results that allows financial institutions to become more competitive with money market mutual funds. These types of accounts are typically insured by the FDIC.
Is a money market account a savings account?
Yes. A money market account is a high yield savings account that pays out a much higher interest rate than a traditional savings account. It also gives the owner of the account a limited check writing ability.
How to earn money online through a share market?
While it is possible to earn money through a share market, it is important to understand that it is just as easy to lose money. To earn money through a share market, set up an investment portfolio, earn from capital appreciation by investing in shares and earn from dividends. Check out our big list of other ways to earn money fast. Or you can use apps to make money fast from your phone.
Why use a money market account?
You want to use a money market account compared to a traditional savings account because not only do these types of accounts pay out in higher interest rates, but the banks of these accounts are limited in what they can do with the funds. You can treat this as sort of a residual income business opportunity since your money will be working for you instead of just sitting in an account doing nothing.
What is a money market account vs. savings?
Unlike a traditional savings account, a money market account is an interest-bearing account that gives its owner the ability to write a limited number of checks. These types of accounts pay out 1.5% in interest compared to a savings account. You may also want to look at Discover high yield savings rates though as a comparison.
What is a money market investment?
A money market investment allows owners of these accounts to invest in capital of CD’s or certificates of deposit, government bonds or low risk investments, allowing financial institutions to offer high interest rates.
What is a certificate of deposit in money market?
A certificate of deposit is also known as a CD. CD’s are typically issued through commercial banks, but these types of deposits can also be purchased from various brokerage firms.
What is a growth money market savings account?
The growth rate for a growth money market savings account typically increases as the balance of the account grows. You can grow your account by $50 with every statement cycle.
Is a 401k a money market account?
A money market account and a 401k account are not the same thing. A money market account is a type of savings account while a 401k account is an account primarily used to make investments.
How do money market accounts compare with checking accounts?
Unlike checking accounts, money market accounts combine better interest rates with limited access to funds by the financial institution. However, a checking account does offer unlimited transactions and allows you to manage funds daily.
What are the characteristics of money market instruments?
Money market instruments have the following characteristics:
with short term maturities, money market instruments are extremely liquid.
these instruments provide a high priority of safety as their issuers have to have the highest credit ratings.
these instruments are issued at a discount.
How much does a money market account earn?
Typically, a money market account will only earn $20 of interest in one year. However, depending on the interest rate, this amount can increase and can earn as much as $1,000 in a year.
Is a money market account a good investment?
Considering that you are offered a higher interest rate, have access to a limited amount of checks, can access your money whenever you wish, and the financial institution is limited to touching your funds, a money market account is a good and solid investment. Learn more about how to invest small amounts of money. Also take a look at our Ally Bank investing review.
Why a money market account?
A money market account is a savings account that works for you. With higher interest rates that can earn you anywhere between $20 to $1,000 a year, access to your funds immediately and FDIC assurance, a money market account is a good financial decision. Wells Fargo money market rates are some of the best right now.
What are the features of a money market?
The features of a money market include:
insures up to $250,000 of funds in any given account.
Availability of funds-
you can access your funds at any time.
Ability to write checks and have a debit card-
you are issued a limited amount of checks to use.
High Interest rate-
allows you to have a money market account work for you.
Are money market accounts safe if US defaults?
In the case of the US defaulting, any money market account or fund does have some level of risk. However, most accounts have prepared their portfolios in anticipation of such a default and have already taken necessary actions to make sure these accounts have sufficient liquidity.
What is the investment disadvantage of a money market?
The investment disadvantage of a money market account is that most account holders will be required to maintain a minimum balance of their accounts. Account owners will also have to pay a monthly maintenance fee.
Money Market Provider
In this section you will find frequently asked questions regarding what institutions offer money market accounts.
Does USAA have money market accounts?
Yes. USAA offers a money market account that is a much safer alternative to investing in stocks or holding money in a traditional savings account. These accounts offer low fees, as long as they maintain minimum monthly balances.
How to open a money market account?
In order to open a money market account, you first want to shop around at local banks or credit unions to see what your options are, set up a minimum deposit amount and then transfer that amount into your account.
Does Chase bank have money market accounts?
Yes. Chase bank currently offers a high tiered money market account with an interest rate of 0.03% to 0.05% on account balances under $50,000. These types of money market accounts also require payment of a monthly maintenance fee.
Does Bank of America have money market accounts?
No. Bank of America does offer an Interest Checking account that earns account holders interest on their account balance. These types of accounts will earn 0.01% APY on balances below $50,000.
Does TD Ameritrade have a money market account?
No. TD Ameritrade does offer money market funds with high yield, short term instruments. These types of funds require minimum purchase requirements before opening an account, so be sure to talk to a TD Ameritrade accountant before opening an account.
Money Market Rates
This section contains common frequently asked market rate questions pertaining to interest rates of money market accounts and funds.
What is the current money market interest rate?
The interest rates for money market accounts depends on the balance of your money market account. Average money market rates fall between 0.08% and 0.11% depending on the overall balance.
What bank has the highest money market rates?
The bank with the highest money market rate is Sallie Mae with an APY of 2.20%. Next is TIAA Bank with an average APY of 2.15% for a minimum deposit of $5,000 followed by CIT Bank with an average 2.15% APY with a minimum balance of $100.
Money Market Funds
This FAQ’s section contains common frequently asked questions regarding money market funds from how to set one up to the benefits.
Can you lose your money in a money market account?
Since a money market is FDIC insured up to the maximum amount by law, unlike a money market fund, it is unlikely that you will lose any money contained in a money market account.
What is a money market mutual fund?
A money market mutual fund are accounts that are not FDIC insured. Money market mutual funds typically trade in high liquidity or cash equivalent instruments such as CD’s or certificates of deposits.
What is a money market fund?
A money market fund is a mutual funds that deals with investments in cash and equivalent securities. These investments are only meant for the short term and with a high credit quality.
What is money market reform?
Money market reform is a set of rule amendments set by the SEC that is meant to address a possibility financial instability that could be potentially caused by money market funds.
What is a federal money market fund?
A federal money market fund is one of the most conservative investment options today. These types of funds maintain low share prices in exchange for helping to preserve principal investments in the process.
What is the Vanguard federal money market fund?
The Vanguard federal money market fund is a fund that invests in US government securities to help provide current income and preserve principal investments of shareholders by keeping the share price at $1.
What is Fidelity government money market fund?
The Fidelity government money market fund is a fund with more than 99.5% invested in the form of cash or cash equivalents in the form of short-term US government securities or repurchase agreements.
What are money market funds yielding?
You are more likely to earn a higher payout from money market funds if you invest in a fund with much lower expenses. Most money market funds yield at least 1.6% with an expense ratio of 0.16%. If you're looking for higher returns then check out services like Stash Invest or Acorns.
How do money market funds maintain a stable NaV?
Money market funds can maintain a stable NaV by valuing various securities at their amortized costs, calculating their net asset values on a daily basis and rounding the outstanding shares to the nearest cent.
What are the benefits of money market mutual funds?
The benefits of money market mutual funds are:
- They help to provide investors with high liquidity and safety with low risk and short duration security trades.
- Money market mutual funds offer higher yields than traditional money market accounts.
Are money market funds and mutual funds the same?
While the two are different, money market funds and mutual funds share much of the same benefits. Money market funds are the safest of the two options, they both offer portfolio diversity and also offer accessibility to funds.
What is the federal money market settlement fund?
The federal money market settlement fund is a fund that is used to pay for and receive the earnings from trades that you may make as an investor. It allows you to transfer money from your checking account into an account where it will be held until you make an investment.
Do qualified dividends include dividends from money market funds?
Qualified dividends that do not meet the criteria in order to be qualified will be taxed at a higher rate. This can include dividends from money market funds and generated income bonds.
What is a government money market fund?
Government money market funds typically focus on government securities and agreements collateralized by the government. While these types of funds don’t pay the highest yields, they do offer the safest investments.
Money Market Security
This FAQ’s section answers frequently asked questions regarding the safety and security of money market accounts and funds.
Are money market accounts FDIC insured?
Yes. Money market accounts are FDIC insured up to the maximum limit that is allowed by law. That is why it is safer to invest in these accounts versus a money market fund.
Are money market accounts safe?
Any money deposited into a money market account are insured by the Federal Deposit Insurance Corporation or FDIC and as such, are among the safest places to deposit your money.
Is Vanguard money market safe?
Unfortunately, Vanguard money market funds are not insured by the FDIC and with the lack of insurance means that money deposited into these accounts are at risk and are not protected.
Are money market accounts insured?
While sometimes this can depend on the bank that offers money market accounts, most money market accounts are insured and protected by the FDIC, meaning your funds are safe for up to $250,000.