Between March 2022 and July 2023, the Federal Reserve hiked its benchmark rate an impressive 11 times, resulting in a noticeable spike in interest rates for money market accounts (MMAs). However, the landscape shifted when the Fed cut the federal funds rate by 50 basis points in September, followed by reductions of 25 basis points in both November and December. Unsurprisingly, deposit rates, including those for MMAs, started to decline. This situation heightens the importance of comparing MMA rates to ensure your balance earns as much interest as possible.
According to the FDIC, the national average rate for money market accounts is currently 0.66%. While this might not initially seem significant, it’s quite a leap from the 0.07% average just three years ago, marking a substantial increase in a relatively short time frame. This sharp hike can be largely attributed to the Federal Reserve’s monetary policy measures aimed at curbing rampant inflation, which began with the first rate hike in March 2022 and continued through a series of 11 increases. However, by the end of 2024, the Fed reversed course, opting to cut rates three times, which has since caused deposit account rates to begin dropping.
Despite this downward trend, a few top-tier accounts still boast APYs exceeding 5%. With the uncertainty surrounding how long these rates will last, it might be worth considering opening a money market account now to capitalize on these high rates.
Here’s a snapshot of some of the most competitive MMA rates available today. For a comprehensive list, check out our top 10 money market accounts currently on offer. Additionally, the table below lists some of the best savings and money market account rates from our vetted partners.
The interest you can earn from a money market account is tied to the annual percentage yield (APY), which is a reflection of your total earnings after one year, taking into account both the base interest rate and the frequency of compounding, with many MMAs compounding interest daily.
For instance, if you deposit $1,000 into a money market account with an average interest rate of 0.66% and daily compounding, by the end of the year, your balance would rise to $1,006.62—your original $1,000 plus $6.62 in interest. On the other hand, if you opt for a high-yield MMA with a 5% APY, your balance would grow to $1,051.27 over the same period, earning you $51.27 in interest.
The potential for earning increases with the amount you deposit. For example, if you deposit $10,000 in an MMA with a 5% APY, you’d see your balance grow to $10,512.67 after a year, netting $512.67 in interest.
