Savers looking to put money aside for the short-term have many options, with money market accounts being one of the best.
A money market account can help you in several ways, from growing an emergency fund, to saving for a new home, and everything in between.
Since different banks and credit unions offer a wide range of accounts, there are several other things to consider in addition to who offers the highest rates.
In this article, we’ll cover the best money market account rates available and how to choose the best account for you.
Best Money Market Accounts
Here are the top 14 banks offering the best money market accounts in June 2021:
- Ally Bank
- Axos Bank
- BMO Harris
- CIT Bank
- Connexus Credit Union
- First Internet Bank
- Navy Federal Credit Union
- nbkc Bank
- Northern Bank Direct
- Sallie Mae
- TIAA Bank
1. Ally Bank
Ally Bank’s money market account offers an APY of 0.50% on all tiers, meaning that you’ll get the full rate, regardless of how much money you have in your account.
There are no minimum balance requirements or maintenance fees, making it much easier to use this account according to your financial situation and goals.
Excessive transactions will cost $10 each, but Ally is refunding this at the moment due to Regulation D being deleted. The account also features unlimited withdrawals from all Allpoint ATMs with no fees.
The account can be opened in the name of a trust and offers 24/7 support and remote check deposits.
2. Axos Bank
Axos Bank is currently offering an APY of 0.60% on the Axos High Yield Money Market accounts.
This rate is applicable on all tiers, so you’ll get the full rate regardless of how much money you have in your account.
The account features no monthly maintenance fees and no balance requirements, making it accessible for many people. There is, however, a minimum opening deposit, which is set at $1,000.00.
You can make extra money by inviting friends to join Axos with $20 up for grabs for each successful referral, and your friend gets an additional $20 too.
Security is relatively high, with account alerts and biometric authentication helping you stay on top of things right from your phone.
3. BMO Harris
BMO Harris’s Premium Money Market account offers a tiered APY rate with the applicable rate depending on your balance.
To get the full rate of 0.10%, you need to maintain an account balance of $25,000 or over. Anything less than this will see the rate cut in half to 0.05%. You need to have a minimum balance of $5,000 to earn any interest.
There is a minimum opening deposit requirement of $5,000. Still, you don’t need to keep a minimum balance unless you want to earn interest. Keeping a balance of $0 may also result in account closure.
The account does not have any monthly fees, but withdrawals and transfers have some limitations. Withdrawals and transfers done in person at a branch, via ATM, messenger, or check requests by mail or phone are unlimited. All other transactions are limited to 6 per monthly billing cycle.
BrioDirect’s High Interest Money Market account offers two APY rates depending on your balance.
To get the full rate of 0.60%, you need to have a balance of $25,000 or more, while anything less than that will get you the lower rate of 0.25%.
The account has no maintenance fees, and you can make up to 6 withdrawals per month without incurring any fees. Should you exceed this limit, you can expect to pay a fee of $10.
The account does not offer check-writing privileges. The minimum deposit amount required to open the account is set at $100.
5. CIT Bank
CIT Bank’s Money Market Account offers an APY of 0.50%, available on all balances.
To open the account, you’ll need to deposit a minimum of $100, which can be deposited by mailing a check, ACH electronic transfer, or wire transfer.
Interest is compounded daily and paid out monthly. There is a $10 fee for each transaction over and above the allowed 6 with a monthly cap of $50. The account also includes access to Bill Pay, Zelle, and PayPal.
There are no monthly service fees, but overdraft costs $25. Outgoing wire transfers will set you back $10 if your average daily balance is below $25,000, otherwise, it’s free.
6. Connexus Credit Union
Connexus Credit Union MMA has an APY of up to 1.15%. Still, you’ll need to meet the highest balance tier to achieve this.
You’ll need to keep a balance of at least $1,000.00 to earn interest – balances below this amount get nothing at all.
The APY starts at 0.50% for balances between $1,000 and $9,999.99. It goes up in tiers to a maximum of 1.15% for balances of $100,000.00 or more.
Withdrawals are limited to 4 per month, and the minimum opening deposit is set at $1,000. You also need to have an active checking account with the credit union to qualify.
Discover Bank’s Money Market Accounts offer an APY rate that goes as high as 0.35%. You’ll need a balance of $100,000 or more to get this rate, or you’ll get the slightly lower rate of 0.30%.
There is no minimum balance and no fees for most things, including NSF (insufficient funds) or excessive transactions.
The bank may refuse to pay the excessive transactions, but this rule is not being enforced at the moment. ATM withdrawals are unlimited.
You also get access to Discover’s mobile banking app, including features such as mobile check deposits, ATM locator, and the ability to freeze your debit card. You can log in with Face ID or your fingerprint for added security if your device supports this.
8. First Internet Bank
First Internet Bank’s MMAs come with an APY of 0.50%, available on all tiers.
There is a monthly maintenance fee of $5.00 that you can avoid by maintaining an average daily balance of at least $4,000.
The bank updates their rate by 10 AM EST every day, so you’ll need to visit their website after this time to find the applicable rate for the day.
The minimum deposit required to open the account is $100, and transfers are limited to 6 per month. The account also comes with an ATM surcharge rebate of $10 per month.
9. Navy Federal Credit Union
Navy Federal Credit Union offers two types of MMSAs (Money Market Savings Account) with a maximum rate of 0.50%. The rate you get will depend on the type of account you choose as well as your balance.
The standard account is called the Money Market Savings Account. It offers an APY of 0.40% on balances up to $9,999.99 and an APY of 0.45% on balances over $10,000.
The Jumbo Money Market Savings Account offers an APY of 0.25% on balances up to $99,999.99 and 0.50% on balances over $100,000.
The account includes access to checks and ATM withdrawals while the interest is compounded and paid monthly.
10. nbkc Bank
nbkc Bank offers a personal money market account with an APY of 0.40% on all balances. There is no minimum opening deposit or balance requirements, making this account very accessible.
Like many other accounts, the rate can change after the account is opened. While deposits are typically available by the next day, deposits done within the first 30 days of account opening can remain on hold for as long as nine business days.
Still, typically they will clear within five business days.
Receiving domestic wire transfers is free while sending them will cost $5.00 per transfer. International wires cost $45.00 each.
11. Northern Bank Direct
Northern Bank Direct’s Money Market Account offers an APY of 0.50%, but you’ll need to deposit at least $5,000 to open the account. There are no maintenance fees and no balance requirements.
The 0.50% rate is applicable on balances of up to $250,000. If you exceed this, the rate will drop by half to 0.25%, which applies to the entire balance.
Transactions are limited to 6 per month, with excessive transactions incurring a $20 fee. The bank is also a member of the SUM Program, which means that you’ll withdraw money from these ATMs without paying a fee.
12. Sallie Mae
Sallie Mae’s Money Market Account has an APY of 0.40%, making it quite competitive. There are no minimum balance requirements and no monthly fees, making this account very accessible overall.
The account includes writing checks and online account management to help you manage the account on the go.
Transfers are free, and withdrawals are limited to 6 per month. Excessive transactions carry a fee, but this is limited to 7 per monthly billing cycle.
Synchrony offers Money Market accounts with an APY of 0.35%. This rate is applicable on all balance tiers, which means you’ll make this much regardless of how much money you have in your account.
There are no minimum balance requirements, but if you open an IRA MMA, you will need to deposit at least $250 to open the account. The account is FDIC insured and includes the ability to write checks, make ATM withdrawals or withdraw your money online or by phone – depending on your preference.
14. TIAA Bank
TIAA Bank’s Money Market accounts offer an APY rate of 0.40%. This rate is available on all balance tiers and comes with a yield pledge. Through this pledge, the bank guarantees to carry out weekly reviews of their rate. They look at what their competitors offer and adjust to make sure they’re in the top 5%.
The account has no monthly fee. This account’s minimum opening deposit is $500 to deposit by mail, online transfer, or through mobile deposit.
If you’re worried about safety, the bank also carries a web safety guarantee. The guarantee promises 100% protection for any funds lost due to unauthorized online access or a mistake on their part.
What is a Money Market Account?
A Money Market Account (MMA or MMSA) is a type of savings account that includes some features that some types of checking accounts offer. These features can have the ability to write checks and a debit card – but this differs from one bank to the next.
MMAs also come with a generous APY, which is typically higher than what checking accounts offer. That said, it could be lower than what you’d get by opening a savings account or a high yield savings account.
There are no rules that say which type of account has a lower or higher interest rate. Each bank is free to offer different rates on different accounts. That’s why it’s important first to assess your financial needs and then see which type of account is best suited to meet your goals.
Is a money market account worth it?
As we said earlier, a money market account sits between a Saving Account and a checking account. Due to some banks’ withdrawal limitations, you shouldn’t get a Money Market Account instead of a checking account. Still, you can get a money market account instead of a savings account.
Unlike traditional savings accounts, MMAs will typically include a debit card and check writing, making it easier to access your money. Of course, this is not the case at every bank. Sometimes, it can get quite blurry what differences exist between the different types of accounts.
The best way to look at money market Accounts is just another type of account that can help you reach your goals faster. It might not be advisable to consider getting this type of account for its own sake, but only if it fits within the financial goals that you have.
How does APY work?
APY stands for Annual Percentage Yield. While this might sound similar to APR, which stands for Annual Percentage Rate, they work a bit differently.
It’s worth talking about two other numbers while discussing APY rates – compounding period and payment frequency. We will cover these in a short while.
Banks will always list APY rates as percentages, which can be a bit confusing. The number refers to the percentage of your money the financial institution will pay you. Different banks and credit unions offer different rates, but they’re not set in stone and will typically fluctuate.
The fluctuation happens because banks use the Federal Fund Rate as the basis of their rate. If the federal rate rises or falls, the APY rate will go up or down accordingly, resulting in a low or high APY. So, keeping an eye on the effective rate the bank is offering you is a good idea, as it’ll help make sure that you’re getting a competitive APY.
Banks set APY over one year, which means that the bank will pay account holders that much over one year. How banks work this out can change from one institution to another. That’s why the compounding period is important.
When a rate compounds daily, the bank divides the rate by the number of days, and that rate applies daily. The bank will then pay you the accrued interest according to the payment frequency (generally once a month).
Once the interest is paid to the account, provided that you didn’t withdraw any money, the bank will use the new balance (principal + interest paid) to work out compound interest. That means you’ll earn interest on your interest, helping you make even more money.
Frequently Asked Questions
Can you lose your money in a money market account?
No, you can’t lose your money in a money market account. That’s because the bank doesn’t invest your money in risky markets such as stocks and forex, so your money is safe.
As an added layer of protection, because your account is insured, you can rest easier knowing that you are covered should something happen to the bank or credit union where you hold your account.
What is Regulation D?
Regulation D is a regulation by the Federal Reserve Board that limits the number of withdrawals from savings accounts to 6 per month. Since money market accounts are a type of savings, this rule can apply even to these accounts.
On the 24th of April 2020, the Board of Governors of the Federal Reserve System deleted this rule, and many banks followed suit.
Banks who still apply this rule will charge a few for excessive transactions, which means more than six transactions per month. You might even face account closure if you consistently make more than the allowed number of transactions. Because of this, it is important to check what the rules are before opening an account.
Which bank has the best money market account?
With all accounts having their pros and cons, no one account will be the best for everyone. That’s is especially true since everyone has specific needs and requirements. While many might equate a higher APY with a better account, this is not always the case. There are many other things to include in your considerations, such as:
- Requirements – Many accounts come with certain conditions you’ll need to meet, like an initial deposit or keeping an account balance to get the highest rate.
- Insurance – FDIC or NCUA can help you keep your money safe and secure should something happen to the bank or credit union.
- Fees – Fees such as maintenance fees and ATM fees can eat into the interest paid.
- Interest rate – While there are many things to consider, the interest rate offered remains essential as this will determine what you’ll be able to make.
- Perks – Perks such as ATM cards, checks, and online banking access can make the experience easier and more accessible.
Where can I get the most interest on my money?
Money Market accounts are known to offer high-interest rates. Many online banks provide MMAs with interests that are typically higher than those offered by brick-and-mortar bank money market accounts. That’s because online banks tend to have lower overheads and, as such, can provide better rates to their customers, especially on higher balances.
Credit unions also tend to offer APY rates that are higher than average. It’s important to keep in mind that credit unions require a membership, which may have some restrictions. Always check the requirements carefully before committing yourself to one account.
How to choose the best MMA for you
Before getting started, you might want to sit down and think about why you want a money market account and what you hope this will help you achieve. You might also want to consider how much money you can set aside, as that’ll also influence which account is best for you.
While the accounts with the most competitive rates might seem like the best ones, this is not always the case. The truth of the matter is that choosing the best one is not always a straightforward affair.
In this section, we will be covering some of the most important aspects of MMAs. None of these things are necessarily good or bad, but they can put extra strain on your finances – depending on how you want to use the account.
Requirements: One of the first things to check is whether the account has minimum opening deposits and minimum balances. While many accounts have low barriers to entry, others impose hefty requirements. Making sure you can meet this is the first step.
Fees: Bank fees can really eat into your interest (and sometimes your savings, too), so familiarizing yourself with the bank’s fee schedule is important. Costs, such as monthly maintenance fees, can often be avoided, as long as you meet the bank’s requirements. Make sure you can cover these before choosing an account.
APY rate: Once you’re sure that you can meet the requirements and avoid most, if not all, fees, the APY rate is the next important thing to consider. The higher the APY rate, the more interest you’ll make on your money. Do check if the APY rate is tiered, then try to plan how much money you will be able to save. Knowing this can help you determine how much money you will be able to make.
Access: Most MMAs limit the number of withdrawals you can make per month while others do not. Think about why you will use the account and then see if the allocated limits can work for you.
Digital banking: Many of us would prefer not to queue at the bank, making online banking and mobile banking relatively important. Check what functionality the bank offers through their online banking portal or mobile app. See if this is enough for you to carry out most, if not all, of your banking needs.
Insurance: Making sure that your account is insured can save you from a lot of trouble down the line. While it’s unlikely that your bank or credit union will go bust, it’s not unheard of either. By making sure your account is insured, you can rest well, knowing that should the worst happen, you’re covered. Banks insure their accounts through the FDIC (Federal Deposit Insurance Corporation). In contrast, credit unions insure their accounts through NCUA (National Credit Union Administration). In both cases, accounts are usually insured up to $250,000.
Is a money market account a good idea?
As far as deposit accounts go, a money market account offers some of the best interest rates with little downside potential. That’s because you’re saving money in an insured account. Do keep in mind that many MMAs come with restrictions, including the number of withdrawals you can make in a given month.
One other option that you might want to consider is an online savings account. These accounts also tend to come with good interest rates, but you might have to give up on some perks that come with MMAs, such as checks and ATM cards.