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current money market rate
Currently, the highest money market interest rate is 5.07%, while the national average interest rate is 0.59%.
Today’s money market account rates are:
Average APY: 0.59% Maximum rate: 5.07%
Source: Kyrinos. Data was accurate as of October 1, 2024. Rates are based on a minimum deposit of $10,000.
What is the money market rate?
The money market rate is the interest rate you earn on the balance in your money market account. Rates on money market accounts are volatile, can change at any time, and are calculated as a percentage of your balance. Money market accounts often have tiered rates, with larger balances getting the best rates.
The interest rate on a money market account is the amount you earn on your balance, and the annual percentage rate (APY) is the amount you earn on your balance, plus the compound interest rate. represents the amount earned in one year. Compound interest is the interest you earn when interest is added to your account.
How do money market accounts work?
A money market account (MMA) is a type of interest-bearing savings account offered by banks and credit unions. Banks’ MMAs are insured by the FDIC, and credit unions’ MMAs are insured by the NCUA. In either case, depositors are covered up to $250,000 per account type, protecting your money in the event of a bank failure. Money market accounts work like other savings accounts in that you are free to deposit money and earn interest on your balance. You can withdraw funds whenever you want, but you may be limited to 6 transactions per statement period.
Money market accounts typically pay higher interest rates than other savings accounts, including traditional savings accounts. And unlike typical savings accounts, they typically offer debit cards, check transfer capabilities, or both, giving you convenient access to your cash. Money market accounts often have higher deposit and balance requirements than many bank accounts.
How to open a money market account
Before opening a money market account, consider at least a few options at different banks. Compare minimum balance requirements, monthly fees, withdrawal limits, and APY to choose the best one. Don’t forget to check the conditions to get the highest interest rate.
You can usually apply for a money market account online or in person. You must provide personal information such as name, employment status, income, address, social security number, and provide government-issued identification. Then, once approved, you can make your first deposit.
Money market accounts and savings accounts
Money market accounts are similar to checking accounts in some ways, but they are most similar to savings accounts. Like a savings account, you earn interest on your balance and can add or remove funds at any time. Balances are guaranteed and easily accessible with either type of account. Both savings and money market accounts may have monthly fees, balance requirements, and trading limits, but money market accounts tend to have higher fees and minimums.
Money market accounts typically offer more flexibility than savings accounts, as they may offer debit card or check transfer capabilities. This makes them a bit like checking accounts, but unlike checking accounts, money market accounts often have limited monthly transactions.
Do money market accounts have value?
If you’re looking for a safe place to store your cash while earning interest, a money market account is worth it. These are FDIC or NCUA insured accounts that offer convenient options for accessing your money and higher interest rates than many other savings accounts. If you can meet the initial deposit requirements to open the account and maintain the balance requirements to get the best rate, a money market account may make sense.
But if you end up paying more in fees than interest, or if minimum balance requirements or trading limits create unnecessary stress, a money market account may not be worth it. If you need an account for everyday use, consider an interest checking account. If the minimum amount is low, a savings account may work better for you.
