Current Money Market Rates
The current average money market rate is 0.61%, while the highest rate is 5.15%.
Here are the current rates for money market accounts:
Average annual interest rate: 0.61%
Highest rate: 5.15%
Source: Curinos. Data accurate as of September 16, 2024. Rates are based on a minimum deposit of $10,000.
What are money market rates?
Money market rates are the interest rates you earn on your money market account balance. Money market account rates are variable, meaning they can change at any time, and are calculated as a percentage of your balance. Money market accounts often have tiered rates, with higher balances earning the best rates.
The interest rate on a money market account is the amount you earn on your balance, and the annual percentage yield (APY) is the amount you earn on your balance plus interest that compounds over the course of a year. Compound interest is the interest you earn on interest as it’s added to your account.
How does a money market account work?
Money market accounts are interest-bearing deposit accounts that work similarly to savings accounts. You deposit money as soon as you have some, and the longer you leave it alone, the more interest it earns. These accounts are insured by the FDIC for banks and the NCUA for credit unions up to $250,000 per depositor. Money market accounts offer convenient access to funds, often including checking and debit cards, although you may be limited to six monthly transactions.
Compared to traditional savings accounts, money market accounts typically offer higher interest rates. However, they tend to require higher deposits and minimum balances to qualify.
How to Open a Money Market Account
To open a money market account, start by researching accounts to choose the option that offers the best rates for the amount you plan to save. Make sure you can meet the opening and current balance requirements to earn interest and avoid fees. In addition to rates and minimums, consider account fees, withdrawal limits, and other features to find the best fit.
When you’re ready to open an account, you can apply online or at a bank branch. The application will ask for personal information, including your name, address, Social Security number, employment status, and income. You’ll also need to provide a government-issued ID. Once your application is approved, you can make your first deposit. Be sure to transfer at least the minimum opening deposit required.
Money Market Account vs. Savings Account
Money market accounts are similar to checking accounts in some ways, but they’re mostly similar to savings accounts. Like savings accounts, you earn interest on your balance and can add or withdraw funds at any time. Your balance is insured and easily accessible in both types of accounts. Savings accounts and money market accounts can both have monthly fees, balance requirements, and transaction limits, but money market accounts tend to have higher fees and minimums.
Money market accounts are generally more flexible than savings accounts because they can offer debit cards and check-writing features. This makes them somewhat similar to checking accounts, but unlike checking accounts, money market accounts often limit monthly transactions.
Is a money market account worth it?
A money market account is a good idea if you’re looking for a safe place to keep your money while earning interest. These are FDIC- or NCUA-insured accounts that offer convenient options for accessing your money and higher interest rates than many other deposit accounts. If you can meet the initial deposit requirements to open an account and maintain the balance requirements to qualify for the best rates, a money market account may be a good fit for you.
