Updated February 2, 2018
Minimum Balance Amount
Northern Bank Direct
Salem Five Direct
Self-Help Credit Union
Premier Members Credit Union
Up to $2k
Traditional banks are paying very low interest rates on money market accounts. For example, BB&T pays between 0.01% and 0.04% APY. Fortunately, you do not need to settle for such ridiculously low rates. You can easily find the best money market rates at internet banks paying 1.30% or more. If you put $50,000 into BB&T's account at 0.04%, you will only earn $20 of interest over one year. That same money in an account paying 1.30% would earn you $650 of interest. And you can typically open and fund an online money market account in less than 10 minutes. Also, the differences between savings accounts and money market accounts are narrowing because rates on money market account are increasing each year. You can currently earn the same top rate with a savings account from one bank and a money market account from another.
MagnifyMoney searches over 12,000 banks and credit unions to find the money market accounts paying the highest interest rates. Competition has been increasing and there is a pricing war. As a result, this month there are a lot of new names on the list (many of which you probably will not recognize). Here are the best rates for February 2018:
1. Top Rate: UFB Direct - 1.60% APY, $5,000 minimum balance to avoid a monthly fee
UFB Direct is a division of BofI Federal Bank, a federally chartered, publicly traded and FDIC-insured bank based in San Diego. In recent months, UFB Direct has become increasingly aggressive with high rates targeting big balances. The APY of 1.60% is the highest that we have found. However, there is one catch. You need to keep at least $5,000 in the account in order to avoid a monthly maintenance fee of $10.00. You will get a Visa debit card and have access to limited check writing. We think this is the best option for people with big balances that they want to keep in a money market account.
2. Favorite Online Package: Ally - 0.90% APY, no minimum deposit, and link to free checking
Ally Bank is a very popular internet-only bank. If you keep a daily balance of $5,000 or less, you will earn the 0.90% APY. If you're able to keep a minimum daily balance of $25,000 the APY increases to 1.00%. Although the interest rate on the money market account is not the highest, Ally does offer a very competitive overall package - particularly if you link the account to an Ally checking account. The checking account has no minimum balance and no monthly fee. You can link your money market account to your checking account to provide overdraft protection. Money would be transferred to your checking account with no transaction fee if you ever made a mistake. You would be able to access your money market account with your Ally ATM card, which has free AllPoint access and up to $10 of non-Ally ATM fees reimbursed every month. This money market account is a nice way to provide yourself with overdraft protection while earning interest. If you don't need check-writing capabilities on your savings, you would still be better off with Ally's savings account.
on Ally Bank’s secure website
3. Highest Overall Rate: ableBanking – 1.70% APY, $250 minimum balance, but no check-writing
ableBanking is a division of Northeast Bancorp, a community bank headquartered in Maine since 1872. The bank has over $1 billion in assets, and your deposit would be FDIC insured up to the legal limit. At 1.70% APY, this is the highest money market rate that we have been able to find (from a bank) in the country. There is a minimum deposit of $250, no monthly fee and you do not need to be a resident of Maine (any US resident can open an account). Unfortunately, the account does not come with check-writing privileges and there is no ATM access. You can deposit and access your funds via ACH (electronic transfer), which can take a couple of days. Just remember: there is a limit of 6 withdrawals per calendar month. When we called to ask questions about the account, we could reach a customer service representative very quickly. This is a good option from a small bank with a great high rate.
4. High Rate: Northern Bank Direct – 1.51% APY, $5,000 minimum to open, checks available
Northern Bank Direct is the online division of Northern Bank, which is located in Massachusetts. While you’ll have to deposit $5,000 to earn the 1.51% APY, you won’t be charged a monthly fee, you’ll have check writing capabilities, and access to surcharge-free ATMS through their affiliation in the SUM® Program. Just keep in mind that if you use an ATM that doesn’t participate in the SUM® Program, you may be charged a fee from the ATM’s owner or operator. You can also make withdrawals online through their electronic funds transfer feature, but if you make more than six transfers per month regardless of which transfer method you use, you’ll be charged $20 for each additional transfer. They don’t limit how many deposits you can make and you’re able to deposit money into this money market account straight from their mobile app. This is a great option for savers with high balances who want the ability to write checks, have ATM access, and bank on-the-go.
5. High Rate: My eBanc – 1.50% APY, $5,000 minimum to open, checks available
My eBanc, the online division of BAC Florida Bank, is currently rewarding a 1.50% APY on their Super Saver Money Market Account. You’ll need $5,000 to open the account and you’ll need to maintain an average daily balance of $5,000 during the statement cycle to avoid their monthly fee. If the average daily balance falls below $5,000, a $15 fee will be charged. If you choose to open more deposit accounts with My eBanc, they’ll assess the aggregate amount between all accounts. If the aggregate amount is $5,000 or more, they’ll also waive the $15 fee. Check writing is available, but they limit the amount of checks you can write to six due to regulatory limitations. They also offer a debit card if you open their Advantage Checking account at the same time you open their money market account. If you choose to just open their Super Saver Money Market account, they’ll issue an ATM card. They’ll reimburse all ATM transaction fees. Just keep in mind that you’re limited to six transactions per statement cycle regardless of the method you choose to withdraw funds. If you go above that limit, you’ll be charged $10 per additional transfer. If you exceed six transfers in any three months during a 12-month period, My eBanc will close the account. Good news is, you’ll be able to make as many deposits as you’d like and you can do so through their mobile banking app. You’ll also have access to their Money Management Tool, which allows you to keep track of all of your accounts regardless of whether it is a My eBanc account or not.
6. High Rate: Salem Five Direct – 1.50% APY, $100 minimum to open, but no check-writing
If you don’t have $5,000 to deposit, but still want to earn a good rate on a money market account, you can open an account with Salem Five Direct for only $100. While they don’t offer check-writing capabilities, they do issue a debit card to make withdrawing funds easier. Salem Five Direct also complies with Regulation D by limiting the number of transactions account holders can make to six. If the limit is exceeded, they’ll charge $10 per additional transaction. One other limitation this bank imposes is an External Transfer limit. You will only be able to transfer $5,000 per day and $20,000 per month. So, this account may not be right for you if you tend to withdraw more those amounts. While Salem Five Direct truly does offer a great rate for the right price with this account, they do have a lot of limitations including their online and mobile experience.
7. High Rate: Nationwide Bank – 1.50% APY, $10,000 minimum balance
When you think of Nationwide, you probably think about insurance. However, they offer more than just auto and home insurance. With $1,000 to open their money market account, you can automatically earn an APY of 1.15%. However, in order to earn their 1.50% APY, you’ll have to have a balance of $10,000 or more. They do charge a monthly maintenance fee of $8, but will waive the fee if you maintain a minimum of $1,000 daily. They do have check-writing capabilities as well as an ATM card. The first two ATM transaction made from a non-Nationwide Bank ATM is free per statement cycle, but they’ll charge $1.50 per additional ATM transaction made at a non-Nationwide Bank ATM. Transactions are limited to six per statement cycle and a $5 fee is charged per each additional transaction. They offer online banking and a mobile app that has a remote deposit feature to make your digital banking experience easier.
8. Top Choice: Sallie Mae - 1.50% APY, no minimum balance and checks available
If you have student loan debt, you probably are not very excited to see Sallie Mae at the top of this list. However, many people are unaware that Sallie Mae also operates an internet-only FDIC-insured bank with some of the best interest rates in the country. You can earn 1.50% APY, compounded daily and paid monthly. There is no minimum balance and no monthly maintenance fees. You will have check-writing capabilities (although the standard money market limit of six per month applies to this account). The easiest (and best) way to fund and access your funds is via electronic transfer from your existing checking account. If you want a simple account with no fees and check access - this is a good bet. Sallie Mae has just recently increased the APY (it was previously 1.45%), making this one the best rates in the country.
9. High Rate: Self-Help Credit Union - up to 1.43% APY, $500 minimum deposit and minimum balance
Self-Help is a credit union that anyone can join. If you don't live, work or worship in one of their eligible counties, you can join by donating $5 to the Center for Community Self-Help. The contribution is tax deductible and will make you eligible for credit union membership. (You can learn more about how to join the credit union here.) At a credit union, your funds are insured up to $250,000 - but it is by the NCUA instead of the FDIC. The money market offers an APY of 1.33% on balances from $500 to $500,000. Even better - you can earn 1.43% APY on balances above $500,000. However, you need to deposit at least $500 and the balance during the month cannot go below $500 - otherwise you will be charged a monthly maintenance fee. You are allowed 6 free withdrawals or transfers from the account each month (including checks).
10. Great Rate for Small Deposits: Premier Members Credit Union – 3.00% APY up to $2k
Premier Members Credit Union is open to anyone willing to make a $5 donation Impact on Education, a charity for the Boulder Valley School District. This credit union is currently offering an incredible rate of 3.00% with only $5 to open the account. You can earn this APY on balances up to $2,000. Amazingly, even if you grow the balance up to $5,000, you’ll earn a minimum of 2.10% APY. As the balance increases, the APY decreases to the following:
- $5,000.01-$10,000: 2.10%-1.42%
- $10,000.01-$50,000: 1.42%-0.69%
- $50,000.01-$100,000: 0.69%-0.54%
- $100,000.01-$250,000: 0.54%-0.43%
- $250,000.01+: 0.43%-0.30%
Premier Members Credit Union rewards low balance savers by placing the highest rate with the lowest deposit, but if the balance grows they start using a reverse tier system where they blend the APY as the balance grows. Checks are available with this account, but you can only make six withdrawals per month. Each additional withdrawal will be assessed a $10 fee.
3 Questions To Ask Before Opening A Money Market Account
1. Should I open a savings account or a money market account?
Many years ago, money market accounts were higher risk and paid higher returns. The financial crisis of 2008 changed all of that. Money market accounts are now FDIC-insured up to the legal maximum ($250,000 per institution per individual). Interest rates are now very similar - and there is no material difference. In other words - choose whichever account you want.
In general, you tend to get slightly lower interest rates on money market accounts because you have check-writing capabilities. The best savings accounts pay at least 1.50% APY - very similar to the rates on this page. But at Ally, for example, you can get 1.35% APY on a savings account (no check-writing) and 0.90% on the money market account (with check writing).
We have written a full explanation of the difference between money market and savings accounts here.
2. Am I willing to make a longer term commitment?
Savings accounts and money market accounts pay much lower interest rates than CDs. Right now you can easily get a 1-year CD paying 1.85% APY (with only a $2,000 minimum). You can find the best CD rates here. If you build a CD ladder, you can take advantage of 5-year rates that are now as high as 3.00%.
Money market accounts are great places to keep money that you might need immediately. But the interest rate on a money market account can change right away, at the bank's discretion. To lock in a higher interest rate, you should consider a CD. If you need to get access to your CD early, would forfeit interest (typically from 3-6 months). In most circumstances, putting more of your money into CDs can really help boost your returns.
3. Is a money market account the same as a money market fund?
No, money market accounts (offered by FDIC-insured banks) are not the same as money market funds (most likely sold by your broker). In fact, we really don't know why people even buy money market funds in the current environment.
For example, Vanguard offers the Prime Money Market Fund. Like other money market funds, this one "invests in short-term, high-quality securities." Its objective is to keep the fund trading at $1 and generate a decent return. Right now that return is 1.00% - a bit lower than the returns you see from the money market accounts listed in this article. However, money market funds do not have FDIC insurance.
Most people compare the return of a money market fund (sold by their broker) to the interest rate paid by a traditional bank (0.03%, sold by their local bank teller). As a result, they are willing to take the risk of a money market fund. However, as you can see from the best money market accounts in this article, you can get FDIC insurance and beat the return of most funds. Why earn 1.00% with no FDIC-insurance when you can easily earn 1.60% and have FDIC insurance.
Goldman Sachs Bank USA High-yield 12 Month CD
Synchrony Bank 12 Month CD
Synchrony Bank High Yield Savings
Barclays Online Savings Account
* All banks listed are a Member FDIC.