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current money market rate
The average interest rate in the money market is currently 0.59%, while the current maximum interest rate is 5.07%.
Today’s money market account rates are:
Average APY: 0.59% Maximum rate: 5.07%
Source: Kyrinos. Data was accurate as of October 7, 2024. Rates are based on a minimum deposit of $10,000.
What is the money market rate?
The interest rate on a money market savings account is often referred to as the money market rate. These earnings are typically deposited as a percentage of your savings balance on a daily or monthly basis. Money market rates change daily. Banks and credit unions that pay tiered interest rates often reserve the best interest rate for their largest balances.
Interest rate represents the income you earn from your account balance alone. The annual rate of return that takes into account compound interest is called the annual percentage yield (APY). Compound interest means that you earn interest every time you earn interest.
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
To open a money market account, first research the account and choose the option with the best rate for the amount you plan to save. To earn interest and avoid fees, make sure you meet the starting and continuing balance requirements. In addition to rates and minimums, consider account fees, withdrawal limits, and other features to find the best fit.
When you are ready to open an account, you can submit your application online or at a bank branch. This application asks for personal information such as name, address, social security number, employment status, and income. You must also provide a government-issued ID. Once your application is approved, you can make your first deposit. Please send at least the required starting 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 transaction 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 you earn in 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.
