Best Money Market Accounts & Rates
Savings accounts are great for the short term, but if you’re looking for something that can offer a high APY and a higher return, you might consider opening a money market account. We’ve identified 10 of the best money market account rates available today, from both traditional banks and Fintech firms. Your local bank or credit union probably offers a money market account as a higher-interest alternative to a traditional savings or checking account option—think of MMAs as high yield savings accounts. With the wide range of FDIC-insured money market accounts available from traditional and online banks, though, you aren’t limited to institutions in your immediate geographic area.
The problem? There are so many options that you may not know what will best meet your needs. In fact, with the growing emergence of Fintech brands moving into this space – and offering higher yields and a wider range of services – you may be overwhelmed with the possibilities. To help, we’ve identified some of the most promising MMAs available today, from both traditional banks and Fintech firms as of June 2020.
Banks.com Guide to Choosing the Right Money Market Account Rate
Although MMA interest rates are similar to savings accounts at the moment, rates could increase down the road, providing high yields in the future. Plus, there are a number of MMAs to choose from with higher interest rates so it’s still worth considering over a traditional savings account. For a money market account, you want one that offers at least 1.00% interest rate or above so that your money will grow faster. For example, a balance of $10,000 would earn about $100 in an account with a 1.00% APY. In addition to a high interest rate, look for MMAs that don’t have monthly fees and require a reasonable minimum account balance.
BBVA Compass Bank serves more than 73 million people around the world and has $80 billion in assets, maintaining physical branches in its home state of Alabama as well as throughout the southern U.S. You’ll reap the most rewards if you maintain a $10,000 balance, but you can open an account with as little as $25. You may be able to take advantage of a $100 bonus offer if you deposit at least $10,000 and leave it in your account for at least 90 days.
- Current Interest Rate: 2.00% APY for more than $10,000
- Minimum Deposit/Balance Required: $10,000 to get the best rate
- Fees: $15/month service charge if your balance is less than $10,000. You can avoid the charge by setting up an automatic recurring $25 monthly transfer from a BBVA checking account
- Ease of Use: Excellent. Online banking and mobile banking app tools make moving money quick and easy. BBVA’s mobile app won a 2018 award for its ease of use
2. BMO Harris Bank
BMO Harris Bank’s Platinum Money Market Account permits in-person or online banking from a Chicago-based financial institution with branches in the Midwest, Arizona and Florida. There’s no minimum balance to start earning dividends and no monthly service fee, regardless of your balance, though you’re only guaranteed the cited APY interest rate if you maintain at least a $5,000 balance.
- Current Interest Rate: 2.45% APY
- Minimum Deposit/Balance Required: $5,000
- Fees: No monthly maintenance fee. $3 for third-party ATM use
- Ease of Use: Average. You can perform all the transactions you need online
3. First Internet Bank
OriFirst Internet Bank’s Money Market Savings gives savers a competitive APY and is a great option if you need to use an ATM. First Internet Bank gives you up to $10 per month for ATM surcharge rebates if you go outside their ATM network.
- Current Interest Rate: 1.11% APY
- Minimum Deposit: $100
- Fees: None if you maintain average daily balance of $4,000 ($5 monthly fee if you fall below that amount)
- Ease of Use: Good.
4. Quontic Bank
Quontic Bank’s MMA only requires $100 to open. Currently, you’ll earn a higher APY if you have more than $5,000 in the account and earn an even higher APY if you have more than $150,000 in the account.
- Current Interest Rate: 1.26% APY (for deposits $5,000 and higher)
- Minimum Deposit Required: $100
- Fees: None
- Ease of Use: Good. Access to more than 90,000 surcharge-free ATMs.
5. CIT Bank Money Market Account
CIT, a national online bank, offers an account that works well for those who can’t or don’t wish to maintain a higher monthly balance. Open the account with as little as $100. The interest rate is not as high as others that require higher minimum balances.
- Current Interest Rate: 1.20% APY
- Minimum Deposit Required: $100 ($1,000 to get the best rate)
- Fees: No monthly fees, but a $10 excessive transaction fee, which is capped at $50 per month. It also has an overdraft fee of $25 and a $30 stop payment fee.
- Ease of Use: Average. Since the bank is online only, you must use their website or app to do your banking
6. UFB Direct Money Market Account
UFB requires a relatively high minimum balance to earn the best rates and avoid fees, but they include some nice perks, like check-writing privileges, a debit card and free transfers between your accounts. They also offer a high rate on APY compared to others in this list.
- Current Interest Rate: 1.35% APY ($25,000 to get the best rate; <$25,000 earns 0.5% APY)
- Minimum Deposit Required: $5,000
- Fees: None with $5,000 minimum balance (otherwise, $10/month)
- Ease of Use: Good. You can use SMS text messaging to access some parts of your account
7. TIAA Bank
TIAA Bank, formerly known as EverBank, offers competitive rates on banking products, along with its “Yield Pledge,” which maintains its money market account rate will always be competitive ((in the top 5 percent), provided you maintain at least $5,000 in your account. TIAA Bank accounts are IRA-eligible and will reimburse you up to $15 for ATM fees incurred by using non-TIAA Bank ATMs. If you keep a $5,000 minimum balance, TIAA Bank will reimburse all ATM fees charged by other banks.
- Current Interest Rate: 1.01% APY (introductory rate)
- Minimum Deposit Required: $500 ($5,000 balance required for competitive APY)
- Fees: None
- Ease of Use: Great online tools. Allows for mobile check deposits
8. Capital One Performance Savings (f.k.a. Capital One 360 Money Market Account)
Capital One eliminated their money market account and simplified their savings account, giving a top rate with no balance requirements!
- Current Interest Rate: 1.00% APY
- Minimum Deposit Required: None to open or maintain
- Fees: None
- Ease of Use: Good. Capital One has several online tools to help you do you banking and set up automated savings plans. You can add checking and use a debit card with your account
9. Discover Bank Money Market Account
Discover the ease of getting cash from your account whenever you need it, and backs this up with checks, debit cards and a large network of ATMs that you can quickly locate via mobile app.
- Current Interest Rate: 0.90% APY (0.95% APY for account balances over $100,000)
- Minimum Deposit Required: $1.00 ($2,500 to avoid monthly fees)
- Fees: None
- Ease of Use: Good. Online tools include the ability to freeze and unfreeze use of your debit card, find ATMS and do regular banking transactions like depositing checks
10. State Farm Bank Money Market Account
State Farm is well known for insurance, but it also makes several financial accounts available; you don’t have to be an insurance client to open a money market account. Don’t, however, think you can bank at your local insurance agent’s office. You’ll need to do most of your transactions online and by phone.
- Current Interest Rate: 1.01% APY
- Minimum Deposit Required: $1,000
- Fees: $10 if you fall below the minimum account balance of $500
- Ease of Use: Average. Online tools allow you to make transactions as needed
Money Market Account FAQs
What is a money market account?
A money market account is a savings account offered by banks or credit unions with some checking account features. Traditionally, they offer higher interest rates than regular savings accounts, but currently, MMA rates are pretty similar to traditional savings accounts. Money markets often have higher minimum deposit or account balance requirements than savings accounts so it’s best to shop around for the best money market account rates.
Is a money market account the same as a money market fund?
No. Money Market Funds are investments, which means they increase or decrease in value as the market fluctuates. Money market accounts are protected like regular savings and checking accounts in that they are backed by the FDIC or NCUA up to $250,000 per depositor. For amounts over $250,000, you may want to consider other accounts for increased insurance protection. Additionally, sometimes your interest rates can fall if you have more than $250,000 in your money market account—another reason to look at other savings options the more you make.
Is a money market account the same as a certificate of deposit (CD)?
A certificate of deposit typically offers higher interest rates than an MMA but they have stricter guidelines on how long you must keep your money in the CD so it’s best if you’re looking to save money you will not need for several years.
Does a money market account work like a checking account?
It depends. Technically, it is not a checking account, but some MMAs have check-writing and debit card features. However, like savings accounts, they are limited to six transfers or withdrawals a month as mandated by the Federal Reserve. These transactions include those made by check, debit card, or online transfer. If you want the ability to write checks and make frequent withdrawals, you may be better off opening an interest-bearing checking account.
Is a money market account taxed?
The funds that you deposit into your MMA aren’t taxed; however, when you earn interest, it is taxable for federal income tax purposes, if your MMA earns more than $10. If your MMA earns more than $10 of interest during a tax year, your bank will send you a Form 1099-INT to file with your return.
Now that you’ve learned about opening a money market account, it’s up to you to identify the best money market rates that most suit your savings needs
An extra choice
Sallie Mae may be mostly associated with student loans, but it also provides a range of savings products for consumers, including money market accounts. There is no minimum deposit to open an account and they offer check-writing privileges. It should be noted that Sallie Mae reserves the right to close a dormant account, which the bank defines as an account with $100 or less in it that doesn’t have qualifying activity for the past 12 months.
- Current Interest Rate: 1.10% APY
- Minimum Deposit Required: $0 (however, they will close the account if it’s not funded within 40 days of opening)
- Fees: None, but they will close accounts they consider dormant and only offer free checks at the time of opening the account (after that there is a fee to order checks)
- Ease of Use: Average. ATM use is limited and reviews are mixed on their online and mobile app usage.