Updated January 14, 2019
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 1.85% 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 1.85% would earn you $925 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 January 2019:
1. High Rate: UFB Direct –2.30% APY, $5,000 minimum deposit and balance to avoid $10 monthly fee
UFB Direct is a division of Axos 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 2.30% is an outstanding rate, but you need to have a balance of at least $25,000. If your balance drops below that, you’ll earn an APY of 0.50%. You’ll also need to keep an average daily balance of 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. Trusted Bank: Capital One – 2.00% APY, $10,000 minimum balance to earn APY
You may think of credit cards when you think of Capital One, but don’t overlook their deposit accounts. The 360 Money Market account currently comes with a great 2.00% APY. While the bank doesn’t require you to have a minimum amount to open the account, you will have to maintain a balance of $10,000 or more to earn their high rate. If your balance falls below that amount, you’ll earn an APY of 0.85%. We really like that Capital One doesn’t impose any monthly fees, and while they don’t offer checks, they do provide you with an ATM card that you can use to withdraw up to $1,000 per day. While you’re able to make an unlimited amount of withdrawals from an ATM per month, remember that you’re limited to making six certain transfers and withdrawals per cycle due to Federal Law. To access this account, you may do so online, in person, or on-the-go through Capital One’s mobile app.
Member FDIC
3. 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.
The rest of these accounts are listed by APY regardless of minimum balance.
4. Highest Overall Rate: Virtual Bank – 2.36% APY, no minimum balance to earn APY
Virtual Bank, a division of IBERIABANK, is currently offering an introductory rate on their money market account that is the highest available. This rate is guaranteed for 12 months and will adjust to the standard rate that is in effect at the time. New customers can earn the 2.36% APY by depositing a minimum of $100. While there isn’t a minimum balance requirement to earn the APY, there is a balance requirement to avoid incurring the $5 monthly service fee. All you’ll have to do is maintain a daily minimum balance of $100 and they’ll waive the monthly fee. While this account doesn’t have any check writing capabilities, you can easily move money in and out of the account via ACH. Virtual Bank has a mobile app, that has the mobile check deposit feature, in addition to their online banking platform.
5. High Rate: Bay State Savings Bank – 2.35% APY, $5,000 minimum to open and avoid $7 monthly fee
Bay State Savings Bank opened its doors in 1895 with a commitment to “be the community bank of choice”for its community. As time has gone on, this community bank has evolved to include digital banking and welcomes all U.S. residents to apply for an account. The bank has also grown to acquire over $400 million in assets. Currently, it’s offering a high rate on a money market account that does more than just hold your money. The money that you deposit helps Bay State Savings Bank support the economic growth of areas in need within Worcester County. So, not only will you be earning an outstanding APY 2.35%, but you’ll also be helping to an area in need of support. There are a few items to be aware of prior to opening the account: there is a $7 monthly fee if you can’t maintain a $5,000 balance and outgoing ACH transfers are limited to $10,000 per transaction. This account does come with check-writing capabilities and online bill payment services. Bay State Savings Bank is not only insured by the FDIC, but they are also insured by the Depositors Insurance Fund (DIF).
6. High Rate: earn.bank – 2.31% APY, $100 to open, $0 minimum balance, $10k to avoid $10 monthly fee
earn.bank is a division of Silvergate Bank, a state-chartered bank headquartered in San Diego, CA. The state-chartered bank has over $1 billion in assets, and your deposit would be FDIC insured up to the legal limit. Silvergate Bank created earn.bank to provide “a transparent, powerful savings vehicle that will help you meet your savings goals”. At 2.31% APY, the internet-only bank is certainly starting out strong. You only need $100 to open the account and there isn’t a minimum balance requirement to earn the high rate. A few downsides to this account include a $10 monthly maintenance fee that comes with a steep balance requirement if you want it waived. You would need to maintain an average daily balance of $10,000 to avoid the monthly fee. The account does not come with check-writing privileges and there is no ATM access. You’ll also want to make sure you’re enrolled in eStatements as you’ll be charged a $25 fee for each paper statement you receive. You can deposit 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.
7. High Rate: Northpointe Bank – 2.30% APY, $25,000 minimum balance, checks and debit card available
Northpointe Bank, is a fairly large bank located in Grand Rapids, MI. They have over $1 billion in assets and have only been around since 1999. Currently, they’re offering a 2.30% APY on their money market account. While you’ll only need $1,000 to open the account, you’ll have to have a minimum balance amount of $25,000 to earn the high APY. If you have a balance between $1,000 and $2,500, you’ll earn an APY of 0.20%. If your balance is between $2,500 and $25,000, you’ll earn 0.25% APY. Once your balance exceeds $1 million, the APY will drop to 0.50%. This account comes with a debit card and checks. Northpointe Bank does not charge a monthly maintenance fee, but will charge a $15 Excess Transaction Fee each time you exceed six certain transactions a month. The offer online banking and have a mobile banking app.
8. High Rate: Pacific National Bank – 2.25% APY, $5,000 minimum balance to earn APY
Pacific National Bank has quite an interesting history. In 1982, Banco Del Pacifico Ecuador (BPE) decided to establish Banco Del Pacifico International in Miami, FL as an Edge Act bank. The Edge Act allowed national banks to do international banking through divisions chartered by the Federal Reserve Bank. By 1985, Banco Del Pacifico International decided to become a national bank charter and changed its name to Pacific National Bank. Since this change, the bank has acquired over $454 million in assets. The bank initially offered its services to South Florida residents, but decided to expand to all U.S. residents with a valid Social Security Number in 2016.Today, Pacific National Bank is offering an online special on its money market account. With a minimum deposit of $5,000, you could earn an APY of 2.25%. You’ll need to maintain that amount in the account on a daily basis to waive the monthly maintenance fee of $25 and to continue earning the high rate. Check writing is available with this account, but keep in mind that you can only make six certain transaction within a month due to federal law. If you exceed six certain transactions within a month, Pacific National Bank will charge a fee of $20 per additional transaction. You may also make ACH transfers, free of charge, without any limits after the initial funding. In addition to banking online, the bank offers a mobile banking app for your convenience.
9. High Rate: BankPurely – 2.25% APY, $25,000 minimum balance, ATM access
10. Top Choice: Sallie Mae – 2.20% 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 2.20% 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, making this one the best rates in the country.
11. High Rate: Self-Help Credit Union – up to 1.91% 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 1.91% on balances from that are at least $500. You also need to maintain the balance during the month – otherwise you will be charged a monthly maintenance fee. You are allowed 6 free withdrawals or transfers from the account each month (including checks).
Special Mention: Great Rate for Small Deposits: Premier Members Credit Union – 4.00% 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 4.00% 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 1.49% APY. As the balance increases, the APY decreases to the following:
- $5,000.01-$10,000: 0.75%
- $10,000.01-$50,000: 0.50%
- $50,000.01-$100,000: 0.40%
- $100,000.01-$250,000: 0.35%
- $250,000.01+: 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 2.20% APY –very similar to the rates on this page. But at Ally, for example, you can get 2.00% 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 2.60% APY (with only a $1,000 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 3.60%.
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 2.36% and have FDIC insurance.
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* Sponsors listed are Member FDIC or NCUA insured.
PenFed is a credit union that offers very competitive interest rates. You need to join the credit union in order to benefit from their products. If you have a military or government affiliation, it is free to join. Otherwise, you would need to join an organization like Voices for America’s Troops, which costs $17.00. Once you are a member, you can open PenFed products (including this certificate) online. Your deposit would be insured by the NCUA, which is the National Credit Union Administration. There is a $1,000 minimum deposit for the one-year certificate.
Barclays is one of the oldest banks in the world. Although they’re based in London, they do have a U.S. presence and offer competitive rates on their CDs and savings account. Currently, they’re offering some of the highest CD rates in the market, and they have an edge over the rest of the institutions on this list: they don’t require a minimum balance to earn the APY or open an account. Deposit as little or as much as you’d like into a term of your choice and you can start earning interest as long as the account is funded within 14 days of opening the CD. Additionally, your funds are insured through the FDIC.
Vio Bank, a division of MidFirst Bank, is an online bank you don’t want to ignore. It launched in August 2018 with highly competitive offerings and it has continued to offer top rates on both its CDs and online savings account. While Vio Bank hasn’t been around very long, they are supported by a financial institution that is established with over $16 billion in assets. We’re extremely impressed with its early start. Here’s a full list its current CD rates:
First Internet Bank was truly the first FDIC-insured online bank. Since its establishment in 1998, this online bank has acquired over $3 billion in assets. Due to its ability to do business completely online, it was able to reduce overhead costs and focus on providing its customers with truly outstanding products. Like most online banks, the benefit of low overhead is higher deposit rates! While First Internet Bank is no longer the only internet bank, it has still maintained its competitive edge by offering high rates on its deposit products. Currently, it’s offering an APY of 2.83% with a minimum deposit of $1,000. Like any good online bank, First Internet Bank has a mobile app that allows you to conveniently manage your accounts on-the-go.
If you’re able to become a member of INOVA Federal Credit Union, you’ll want to consider this CD with an outstanding 3.00% APY. While this CD actually has a 14-month term instead of a 12-month term, the rate is one of the highest for this range. This credit union is only available to those who are employed or are a member of the credit union’s Select Employer Groups or Organizations, or immediate family members or household members of existing members of INOVA Federal Credit Union. In order to find out what the Select Employer Groups or Organizations are, you can either check 
ConnectOne Bank was established in 2005 by a man who couldn’t find a bank that satisfied his financial needs. Since the business model of the bank centered around its clients, the bank grew quickly and has acquired over $5 billion in assets to date. One way that ConnectOne Bank focuses on its clients is by offering competitive deposit rates and even offering special rates that are above what’s being offered in the market. This is evident with its 23-month online CD. For a small deposit of $500, you could earn an APY of 3.15%. You can conveniently open this CD online and all your funds are FDIC-insured.
In 1950, civilians decided to charter Fort Knox Federal Credit Union to help each other out financially. Ten years later, the credit union opened up its field of membership to include military personnel. Today, its field of membership is open to employees of Select Employer Groups, individuals living, working, worshiping, or attending school in eligible areas, active military, Reserve, Guard, or civil service employee, retirees of the military or civil service, and contractors attached to the post. The credit union requires each member to pay a $15 fee at the time you apply for membership. Once you become a member, you can open the credit union’s 22-month CD special, which currently has an APY of 3.05%, with a minimum deposit of $500. Deposits made to this credit union NCUA insured.
Mountain America Credit Union was established in the 1930s to help its members achieve their financial goals. Today, they have grown to serve hundreds of thousands of members and have acquired over $7 billion in assets. This credit union is open to Utah residents in certain areas, family members of existing members of the credit union, and employees and volunteers of a Select Employer Group. If you are a member or become a member of the American Consumer Council, you’ll qualify for membership at Mountain America Credit Union. Once you become a member, you’ll be able to open a CD. You’ll need to deposit a minimum of $500 in order to earn their outstanding 3.35% APY. Accounts can be managed online or through their mobile app. Deposits made to Mountain America Credit Union are insured by the NCUA.
