Recently, the Federal Reserve has taken steps to lower the federal funds rate, which has led to a decrease in deposit rates, particularly those associated with money market accounts. This shift makes it crucial to compare money market account (MMA) rates to maximize returns on your savings.
According to the FDIC, the national average for money market account rates is currently around 0.64%. While that might not seem significant, it’s worth noting that three years ago, the rate was a mere 0.07%. So, in the grand scheme of things, today’s rates are relatively favorable.
Despite the average, some elite accounts are offering over 4% Annual Percentage Yield (APY) right now. These high rates might not last, so it’s wise to consider opening a money market account to benefit from them while they’re available.
Let’s explore some of today’s standout MMA rates:
Check out our recommendations for the top 10 best money market accounts available today.
Moreover, the following table highlights some of the best saving and money market account rates currently available from our trusted partners.
The interest you earn from a money market account is influenced by its APY, a figure that reflects your total earnings over a year by taking into account the basic interest rate and the frequency of compounding (MMAs typically compound interest daily).
For instance, if you deposit $10,000 into an MMA with an average interest rate of 0.64% and daily compounding, your balance would increase to $10,064.20 after one year. That’s your initial $10,000 deposit plus $64.20 in interest.
If you opt for a high-yield money market account boasting a 4% APY, your balance would rise to $10,408.08 over the same period, yielding $408.08 in interest.
Compared to traditional savings accounts, money market accounts might feature more stringent requirements. For instance, MMAs often demand a higher minimum balance to qualify for the best rates or to sidestep fees. Additionally, there might be a cap on the number of withdrawals you can make each month, usually limited to six.
As of now, there are no banks providing a 7% interest rate on money market accounts or any other savings product. However, local banks and credit unions occasionally offer limited-time promotional rates that could hit the 7% mark, though these rates generally apply to a restricted balance.
Curious if 7% interest savings accounts are still around? Discover more here.
