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The Best Jumbo CD Rates in 2021

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

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Reviewed By

Jumbo certificates of deposit (CDs) offer a cautious way to save large sums of money. Like traditional CDs, jumbo CDs feature a predetermined interest rate and term length, as well as early withdrawal penalties. The key difference is that jumbo CDs require much higher opening minimum deposits: typically, that number is $100,000, but we’ve included some with lower minimums as well.

Right now, in an environment of low interest rates, many jumbo CDs are currently paying a lower Average Percentage Yield (APY) than traditional CDs. Jumbo CDs used to be incentivized with higher interest rates, but that’s no longer the case. If you intend to store your money in a long-term savings vehicle, a CD might be right for you, but you should make sure you’re getting the best available interest rate on that deposit.

Top jumbo CD rates in 2021

Below are the best jumbo CD rates available for various terms, but read on for other high-ranking CDs of various lengths.

CD term

Financial institution

Annual percentage yield (APY)

Minimum opening deposit to earn APY

6-monthEFCU Financial0.85%$100,000
12-monthEFCU Financial0.90%$100,000
29-monthHughes Federal Credit Union1.11%$99,000
36-monthHughes Federal Credit Union1.21%$99,000
48-monthInterior Federal Credit Union1.22%$100,000
60-monthMichigan State University Federal Credit Union1.40%$100,000

Best jumbo CDs shorter than a year

#1EFCU Financial

6 Month Jumbo CD from EFCU Financial
  • Term: 6 months
  • APY:0.85%
  • Minimum opening deposit: $100,000

EFCU Financial is a credit union based in South Louisiana, though people from outside the area can join if they become a member of the EFCU Financial Foundation or Louisiana Wildlife Foundation. In addition to their regular and jumbo certificates, EFCU Financial offers a 30-month “bump-up” certificate that allows you to adjust your rate once during the term.

SEE DETAILS Secured

on EFCU Financial’s secure website

NCUA Insured

Veridian Credit Union

9 Month Jumbo CD Special from Veridian Credit Union
  • Term: 9 months
  • APY:0.85%
  • Minimum opening deposit: $100,000

Veridian Credit Union has broad membership eligibility, allowing registered users of the payment platform provider Dwolla to join the credit union. In addition to their nine-month jumbo CD special, Veridian offers a regular nine-month CD special with a minimum balance of $1,000 and an APY of 0.75% — one of the best available rates for short-term CDs.

SEE DETAILS Secured

on Veridian Credit Union’s secure website

NCUA Insured

Luana Savings Bank

6 Month CD Special from Luana Savings Bank
  • Term: 6 months
  • APY:0.75%
  • Minimum opening deposit: $100,000

Headquartered in Northeastern Iowa, Luana Savings Bank has a small geographic footprint and specializes in agricultural lending for farmers in the area. Luana offers CDs with different interest rate tiers, and the bank is currently offering a six-month CD special with an APY of 0.75% for balances over $100,000 (and 0.75% for balances between $50,000 and $99,999).

SEE DETAILS Secured

on Luana Savings Bank’s secure website

Member FDIC

Best 1-year jumbo CDs

#1EFCU Financial

12 Month Jumbo CD from EFCU Financial
  • Term: 12 months
  • APY:0.90%
  • Minimum opening deposit: $100,000

See above for more information on EFCU Financial’s membership eligibility requirements and jumbo CDs.

SEE DETAILS Secured

on EFCU Financial’s secure website

NCUA Insured

Hughes Federal Credit Union

12 Month Jumbo CD from Hughes Federal Credit Union
  • Term: 12 months
  • APY:0.75%
  • Minimum opening deposit: $99,000

Hughes Credit Union is located in Arizona, but you can join from outside the area if you make a small donation to one of a few local charities. Hughes FCU offers some of the best available rates on CDs ranging from six months to three years — there are slightly lower rates for balances that fall below their $99,000 threshold for a jumbo CD.

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on Hughes Federal Credit Union’s secure website

NCUA Insured

Interior Federal Credit Union

12 Month Jumbo Share Certificate from Interior Federal Credit Union
  • Term: 12 months
  • APY:0.71%
  • Minimum opening deposit: $100,000

Interior Federal Credit Union allows people to join by volunteering at a national park or becoming a member of the New Mexico Wildlife Foundation. Its current APY of 0.71% on a 12-month jumbo CD is the same as its traditional certificate, which carries a minimum balance of just $500.

SEE DETAILS Secured

on Interior Federal Credit Union’s secure website

NCUA Insured

Best 2-year jumbo CDs

#1Hughes Federal Credit Union

29 Month Jumbo CD from Hughes Federal Credit Union
  • Term: 29 months
  • APY:1.11%
  • Minimum opening deposit: $99,000

See above for more information on Hughes Federal Credit Union’s membership eligibility requirements and jumbo CDs.

SEE DETAILS Secured

on Hughes Federal Credit Union’s secure website

NCUA Insured

EFCU Financial

24 Month Jumbo CD from EFCU Financial
  • Term: 24 months
  • APY:1.00%
  • Minimum opening deposit: $100,000

See above for more information on EFCU Financial’s membership eligibility requirements and jumbo CDs.

SEE DETAILS Secured

on EFCU Financial’s secure website

NCUA Insured

Interior Federal Credit Union

24 Month Jumbo Share Certificate from Interior Federal Credit Union
  • Term: 24 months
  • APY:0.81%
  • Minimum opening deposit: $100,000

See above for more information on Interior Federal Credit Union’s membership eligibility requirements and jumbo CDs.

SEE DETAILS Secured

on Interior Federal Credit Union’s secure website

NCUA Insured

Best 3-year jumbo CDs

#1Hughes Federal Credit Union

36 Month Jumbo CD from Hughes Federal Credit Union
  • Term: 36 months
  • APY:1.21%
  • Minimum opening deposit: $99,000

See above for more information on Hughes Federal Credit Union’s membership eligibility requirements and jumbo CDs.

SEE DETAILS Secured

on Hughes Federal Credit Union’s secure website

NCUA Insured

EFCU Financial

36 Month Jumbo CD from EFCU Financial
  • Term: 36 months
  • APY:1.10%
  • Minimum opening deposit: $100,000

See above for more information on EFCU Financial’s membership eligibility requirements and jumbo CDs.

SEE DETAILS Secured

on EFCU Financial’s secure website

NCUA Insured

Interior Federal Credit Union

36 Month Jumbo Share Certificate from Interior Federal Credit Union
  • Term: 36 months
  • APY:1.01%
  • Minimum opening deposit: $100,000

See above for more information on Interior Federal Credit Union’s membership eligibility requirements and jumbo CDs.

SEE DETAILS Secured

on Interior Federal Credit Union’s secure website

NCUA Insured

Best 4-year jumbo CDs

#1Interior Federal Credit Union

48 Month Jumbo Share Certificate from Interior Federal Credit Union
  • Term: 48 months
  • APY:1.22%
  • Minimum opening deposit: $100,000

See above for more information on Interior Federal Credit Union’s membership eligibility requirements and jumbo CDs.

SEE DETAILS Secured

on Interior Federal Credit Union’s secure website

NCUA Insured

EFCU Financial

48 Month Jumbo CD from EFCU Financial
  • Term: 48 months
  • APY:1.20%
  • Minimum opening deposit: $100,000

See above for more information on EFCU Financial’s membership eligibility requirements and jumbo CDs.

SEE DETAILS Secured

on EFCU Financial’s secure website

NCUA Insured

Michigan State University Federal Credit Union

4 Year Jumbo CD from Michigan State University Federal Credit Union
  • Term: 48 months
  • APY:1.25%
  • Minimum opening deposit: $100,000

Michigan State University Federal Credit Union serves the university community, but the credit union also extends membership eligibility to anyone who donates $10 to the Desk Drawer Fund. MSU FCU provides variable term certificates from 13 to 23 months, including jumbo CDs, and has terms as short as three months.

SEE DETAILS Secured

on Michigan State University Federal Credit Union’s secure website

NCUA Insured

Best 5-year jumbo CDs

#1Michigan State University Federal Credit Union

5 Year Jumbo CD from Michigan State University Federal Credit Union
  • Term: 60 months
  • APY:1.40%
  • Minimum opening deposit: $100,000

See above for more information on Michigan State University Federal Credit Union’s membership eligibility requirements and jumbo CDs.

SEE DETAILS Secured

on Michigan State University Federal Credit Union’s secure website

NCUA Insured

EFCU Financial

60 Month Jumbo CD from EFCU Financial
  • Term: 60 months
  • APY:1.35%
  • Minimum opening deposit: $100,000

See above for more information on EFCU Financial’s membership eligibility requirements and jumbo CDs.

SEE DETAILS Secured

on EFCU Financial’s secure website

NCUA Insured

Interior Federal Credit Union

60 Month Jumbo Share Certificate from Interior Federal Credit Union
  • Term: 60 months
  • APY:1.27%
  • Minimum opening deposit: $100,000

See above for more information on Interior Federal Credit Union’s membership eligibility requirements and jumbo CDs.

SEE DETAILS Secured

on Interior Federal Credit Union’s secure website

NCUA Insured

What is a jumbo CD?

A jumbo certificate of deposit (CD) is essentially the same as a traditional CD but with a higher minimum deposit requirement and sometimes higher APYs. Financial institutions have different criteria for what’s considered a jumbo CD — MagnifyMoney selected CDs with a minimum of at least $50,000 for this list.

How does a CD work?

At the time of account opening, the CD accountholder makes a deposit and agrees to a predetermined maturation date and interest rate borne on the account. CDs are safe, as long as the bank or credit union is insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA).

Once a CD has been opened, accountholders can’t deposit more money or withdraw their funds without incurring a penalty (in most cases, though there are some specialty CDs that offer that flexibility). The interest rate is also locked in: even if the broader rate environment changes, which affects the APY paid on other types of deposit accounts, the CD rates will stay the same throughout the term.

Alternatives to jumbo CDs

There are plenty of alternatives to jumbo CDs, including traditional CDs (and with traditional CDs, it’s also easier to structure a CD ladder because of their lower minimum deposit requirements, for example). The APY paid on jumbo CDs is currently not much higher than the APY paid on traditional CDs. The current highest APYs on jumbo CDs are less than 1.00% for terms shorter than four years.

A savings account can be a good long-term alternative to a CD, because it gives the accountholder the ability to withdraw their money penalty-free and also bears interest. Interest rates for CDs are generally higher than interest rates for savings accounts, but as of late 2021, the rates paid on deposit accounts are lower than usual across the board. Rates for deposits in savings accounts could improve, while the APY on a jumbo CD is fixed for the entire duration of the deposit.

Jumbo CDs require a substantial deposit, and those funds could be invested in other ways: the stock market may be too risky for the conservative saver, but bond investments are subject to less volatility. Real estate investments, including Real Estate Investment Trusts (REITs), are another option.

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Top 10 Jumbo Money Market Accounts in November 2021

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

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The money market accounts that offer the highest returns are known as jumbo money market accounts. In the past, these high-yielding accounts could have minimum initial deposits as high as $100,000, but today, you can get these higher rates with a much lower initial investment and sometimes there’s no minimum at all. For this round-up, we included APYs that required a minimum balance of $25,000 or higher. All of these rates are significantly higher than today’s national average for money market accounts, which is 0.08% according to the Federal Deposit Insurance Corporation (FDIC).

Best jumbo money market accounts in November 2021

1. Connexus Credit Union — 0.85% APY, $100,000 minimum deposit to earn APY

Money Market Account from Connexus Credit Union If you’re looking to set aside more than $100,000 in a money market account, Connexus Credit Union offers the best rate with a 0.85% APY on balances $100,000 and over. On balances from $20,000 to $99,999.99, you’ll still receive a generous 0.60%APY.

There are several ways to qualify for Connexus membership, including by making a one-time $5 donation to the Connexus Association.

SEE DETAILS Secured

on Connexus Credit Union’s secure website

NCUA Insured

2. State Bank of Texas — 0.75% APY, $100,000 minimum deposit to earn APY

Jumbo Money Market from State Bank of Texas (SBT) To receive the next-best rate on this list, you must keep at least $100,000 in your money market account at the State Bank of Texas. You can avoid this account’s $20 monthly maintenance fee by maintaining an average daily balance of at least $25,000.

SEE DETAILS Secured

on State Bank Of Texas (SBT)’s secure website

Member FDIC

3. Hughes Federal Credit Union — 0.75% APY, $150,000 minimum deposit to earn APY

Ultimate Money Market Savings from Hughes Federal Credit Union In a Hughes Federal Credit Union money market account, you can earn 0.75% APY on balances $150,000 and over or 0.50% APY on balances $50,000 and over.

There are several ways to become a HFCU member, including by donating to one of a few community Special Interest Groups.

SEE DETAILS Secured

on Hughes Federal Credit Union’s secure website

NCUA Insured

4. Veridian Credit Union — 0.75% APY, $250,000 minimum deposit to earn APY

Premier Money Market from Veridian Credit Union Although Veridian Credit Union requires a minimum balance of $250,000 in its money market account to receive 0.75% APY, lower amounts still receive higher-than-average APYs in a tiered structure. For example, a balance between $100,000 – $249,999 receives 0.60%, a balance between $50,000 – $99,999 receives 0.50% APY and so on.  

All Iowa residents and some Nebraska residents are eligible automatically to join VCU. There are a few other ways to qualify as well, including by being a registered user of the ACH payment service Dwolla.

SEE DETAILS Secured

on Veridian Credit Union’s secure website

NCUA Insured

5. Luana Savings Bank — 0.75% APY, $750,000 minimum deposit to earn APY

Insured Money Market from Luana Savings Bank You’ll need a steep minimum balance of $750,000 to receive this APY at Luana Savings Bank. Lower balances receive lower APYs. For example, a balance of $250,000 – $749,999.99 receives 0.60% APY and a balance of $100,000 – $249,999.99 receives 0.50% APY.

Luana’s branches are all in Iowa, but you can also apply for an account with the bank online.

SEE DETAILS Secured

on Luana Savings Bank’s secure website

Member FDIC

6. Prime Alliance Bank — 0.60% APY, no minimum deposit to earn APY

Personal Money Market from Prime Alliance Bank Prime Alliance Bank’s 0.60% APY applies to all balances, so you’ll be able to get this rate at — or even below — a jumbo deposit. This account has no monthly maintenance fees.

You can find a Prime Alliance branch only in Utah, but their services are available to anyone nationwide.

SEE DETAILS Secured

on Prime Alliance Bank’s secure website

Member FDIC

7. Service Credit Union — 0.60% APY, $100,000 minimum deposit to earn APY

Money Market from Service Credit Union A balance of at least $100,000 in a Service Credit Union money market account will earn you a 0.60% APY, and you can still receive 0.45% APY on balances beginning at $25,000 but under $100,000.

There are many ways to qualify for SCU membership, including by joining the American Consumer Council (and you can use the promo code “Service” to do so for free).

SEE DETAILS Secured

on Service Credit Union’s secure website

NCUA Insured

8. The Federal Savings Bank — 0.60% APY, $100,000 minimum deposit to earn APY

Money Market from The Federal Savings Bank The Federal Savings Bank money market account offers a 0.60% APY on balances $100,000 and over, and you can still get 0.40% APY on balances from $50,000 – $99,999.99 and 0.30% APY on balances from $25,000 – $49,999.99.

The Federal Savings Bank’s branches can be found only in Illinois, although anyone nationwide can use their banking services.

SEE DETAILS Secured

on The Federal Savings Bank’s secure website

Member FDIC

9. Quontic Bank — 0.60% APY, $150,000 minimum deposit to earn APY

Personal Money Market from Quontic Bank At Quontic Bank, you’ll earn 0.60% APY on balances $150,000 and over, 0.50% APY on balances between $5,000 – $149,999.99 and 0.40% APY on balances below $4,999,99. Interest compounds daily and this account has no monthly service fees.

Quontic is an all-digital bank, but customers have access to more than 90,000 free ATMs.

SEE DETAILS Secured

on Quontic Bank’s secure website

Member FDIC

10. Langley Federal Credit Union — 0.60% APY, $250,000 minimum deposit to earn APY

Platinum Money Market Savings from Langley Federal Credit Union You’ll need $250,000 to earn 0.60% APY in Langley Federal Credit Union’s Platinum Money Market Savings account. You can still earn 0.40% APY on a balance of at least $100,000 or 0.30% APY on a balance of at least $25,000.

To become a LFCU member, open a savings account with the credit union and make an opening $5 deposit.

SEE DETAILS Secured

on Langley Federal Credit Union’s secure website

NCUA Insured

What is a jumbo money market account?

Jumbo money market accounts are typically called jumbo because they require a significant deposit to earn the top rate. Essentially, the bank or credit union rewards you with a higher rate for placing a hefty deposit at their institution. That makes jumbo money market account rates easily appealing. However, you often have to be able to meet the significant minimum to take advantage.

Jumbo money market accounts are still FDIC insured up to $250,000 for individuals, unlike money market funds.

How jumbo money market account rates compare with regular money market account rates

You may have noticed that many of these accounts do not necessarily have the label “jumbo” attached to them. This is because with the advent of online banking, more and more financial institutions are passing along the savings they incur from not having to maintain brick-and-mortar locations on to their customers via higher returns on products like money market accounts.

For that reason, you’ll notice that many of the highest-yielding accounts on this list can also be found on our Best Money Market Rates & Accounts lineup.

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Best Money Market Rates & Accounts in November 2021

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

 

Reviewed By

If you’re looking to save more money beyond your regular savings account, consider adding a money market account (MMA) to the mix. A money market account can earn at a higher rate than a savings account, especially if you have a larger balance to deposit. Many MMAs tier their rates as well, rewarding higher balances with higher rates.

According to the Federal Deposit Insurance Corporation (FDIC), the current average money market rate is 0.08% — but you can do much better than that if you’re willing to break with traditional brick-and-mortar banks. With so many options out there, however, it may seem daunting to search for a new bank account. We’ve made it easier by rounding up the best money market accounts out there.

To identify the best options, we reviewed over 12,000 banks and credit unions, looking for the highest APYs, as well as considering an account’s minimum requirements and fund accessibility (we’ve featured accounts that require no more than $10,000 to earn the advertised APY). For larger deposits, read our roundup of the best jumbo money market accounts.

Best money market accounts in November 2021

Here are our favorite accounts in November 2021:

Do you have a savings goal in mind? Tell us about it!

1. Premier Members Credit Union — 2.00% APY, no minimum balance to open

Money Market Account from Premier Members Credit Union Premier Members Credit Union has the highest available top-line APY for a money market account with its 2.00% paid on balances up to $2,000. There are lower APY amounts for higher balance tiers, resulting in a blended APY. For example, a balance of $5,000 would receive 2.00% APY on the first $2,000 and 0.35% APY on the rest of the balance. Unless you’re planning on maintaining a much higher balance, PMCU provides some of the best APY rates.

PMCU is based in Colorado and offers broad-based membership through an affiliation with Impact on Education, a charity for the Boulder Valley School District.

SEE DETAILS Secured

on Premier Members Credit Union’s secure website

NCUA Insured

2. Affinity Plus Federal Credit Union — 1.00% APY, no minimum balance to open

Superior Money Market from Affinity Plus Federal Credit Union Affinity Plus Federal Credit Union currently offers a 1.00% APY on its Superior Money Market account for balances up to $25,000. Balances over that amount earn a blended APY. The account has no monthly service charge or minimum deposit requirement. Customers can access their funds through electronic transfers to and from their money market account.

Founded in 1930 and originally called State Capitol Credit Union, Affinity Plus FCU opens membership to members of various Minnesota communities as well as anyone who makes a one-time dues payment of $25 to the Affinity Plus Foundation.

SEE DETAILS Secured

on Affinity Plus Federal Credit Union’s secure website

NCUA Insured

3. Patelco Credit Union — 1.00% APY, no minimum balance to open

Money Market Select Account from Patelco Credit Union Patelco Credit Union offers 1.00% APY on its Money Market Select Account for balances up to $2,000. After that, you’ll earn:

  • 0.50% APY on balances from $2,000.01 to $5,000
  • 0.30% APY on balances from $5,000.01 to $10,000
  • 0.25% APY on balances from $10,000.01 to $50,000
  • 0.20% on balances from $50,000.01 to $100,000
  • 0.15% up to $9,999,999

There is no minimum required to open an account and no monthly fees or minimum monthly balance. The APY applies to each dollar amount in a given range, so a $5,000 deposit would earn 1.00% on the first $2,000 plus 0.50% on the next $3,000 for a blended APY of 0.70%.

Patelco Credit Union is open to anyone through joining the Financial Fitness Association for $8 a year, although Patelco will pay your first annual membership fee. The credit union got its start in 1936 serving employees of the Pacific Telephone and Telegraph Company, which is now a part of AT&T. It has branch locations throughout Northern California.

SEE DETAILS Secured

on Patelco Credit Union’s secure website

NCUA Insured

4. Prime Alliance Bank — 0.60% APY, no minimum balance to open

Personal Money Market from Prime Alliance Bank Established in 2004, Prime Alliance Bank is currently offering a Personal Money Market account with an APY of 0.60% on all balances. There aren’t any monthly fees with this account, nor is a minimum balance required to open the account.

This account can be managed online or via the bank’s mobile app.

SEE DETAILS Secured

on Prime Alliance Bank’s secure website

Member FDIC

5. Vio Bank — 0.55% APY, $100 minimum balance to open

Cornerstone Money Market from Vio Bank Vio Bank currently offers 0.55% APY on its Cornerstone Money Market Account for all balances. You can open an account with $100, and you won’t be charged monthly fees as long as you opt out of paper statements. Account holders are allowed six free withdrawals per monthly statement cycle.

Vio Bank is the online bank division of MidFirst Bank, which is the largest privately held U.S. bank. Deposits are FDIC-insured up to $250,000.

SEE DETAILS Secured

on Vio Bank’s secure website

Member FDIC

6. Ally Bank — 0.50% APY, no minimum balance to open

Money Market Account from Ally Bank Ally Bank is a popular internet-only bank, offering a 0.50% APY on its Money Market Account. 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.

By linking your money market account to your checking account, you provide overdraft protection there. The checking account has no minimum balance requirement and no monthly fee.

SEE DETAILS Secured

on Ally Bank’s secure website

Member FDIC

7. National Cooperative Bank — 0.50% APY, $100 minimum deposit to open

Impact Money Market from National Cooperative Bank The National Cooperative Bank is currently offering a 0.50% APY on all balances in its Impact Money Market account. While there is a $100 minimum deposit required to open this account, there is no required minimum balance in order to earn the APY. Interest is compounded daily and credited monthly. Note that this account charges a monthly maintenance fee of $25 if your average monthly balance dips below $5,000.

While the National Cooperative Bank has only three locations in Ohio, Alaska and New York, its services are available to consumers nationwide, online.

SEE DETAILS Secured

on National Cooperative Bank’s secure website

Member FDIC

8. First Internet Bank — 0.50% APY, $100 minimum balance to open

Money Market Savings from First Internet Bank First Internet Bank boasts a robust rate of 0.50% APY on its Money Market Savings. There is a minimum deposit of just $100 required for this account. It also has a $5 monthly service charge, which can be waived by maintaining an average daily balance of at least $4,000.

First Internet Bank has roots dating back to 1999, and it claims to be the first FDIC-insured institution to operate entirely online.

SEE DETAILS Secured

on First Internet Bank’s secure website

Member FDIC

9. Sallie Mae Bank — 0.50% APY, no minimum balance to open

Money Market from Sallie Mae Bank Sallie Mae Bank offers 0.50% APY, compounded daily and paid monthly, on its money market account. There’s no minimum balance to open an account, no monthly fees and no fees for transfers.

Even though the bank specializes in student loans, they offer deposit accounts like a savings account, money market account and certificates of deposit (CDs).

SEE DETAILS Secured

on Sallie Mae Bank’s secure website

Member FDIC

10. Western State Bank — 0.50% APY, no minimum balance to open

High Yield Money Market from Western State Bank Western State Bank’s money market account offers 0.50% APY on all balances. Interest is compounded and credited monthly. There is no minimum balance required and no monthly fees, although a $5,000 initial deposit is required. However, even if you drop below that amount later, you’ll still receive the 0.50% APY.

Western State Bank is a Midwestern, employee-owned regional bank with locations in North Dakota and Arizona.

SEE DETAILS Secured

on Western State Bank’s secure website

Member FDIC

Money market accounts: FAQs

A money market account is a special type of savings account. Cash you put in the account remains deposited with the financial institution, where it earns a variable annual percentage yield (APY). Because the name of this deposit product has the word market in it, you may assume that a money market account is some kind of investment product, but it’s not.

Money market accounts are a good choice if you have a big deposit you’d like to keep safe and growing at a high interest rate. Then, when you need to access that money — perhaps for an upcoming purchase or in an emergency — you can often easily do so with an ATM or debit card or by writing a check.

Pros:Cons:
  • Typically carry higher interest rates than savings accounts
  • Convenient access to your funds with check-writing abilities and a debit/ATM card (though not offered on all accounts)

  • May carry monthly maintenance fees or a high balance to waive one
  • Still limited to six transfers and withdrawals per month like a savings account (or you’ll face a fee)
  • Not the highest yield product for money you won’t need in the immediate future

Money market accounts often earn a higher rate than standard savings accounts. The caveat is that MMAs often require higher opening deposits or higher balances than a standard savings account. Even so, you may also find that one bank’s top money market rate earns at the same rate (or lower) as a savings account at another bank.

Another feature that differentiates a money market account from a savings account is that institutions generally make it easier to access deposited funds in a money market account by offering checks and ATM cards.

Money market accounts, like deposit accounts, provide FDIC insurance on your deposits up to $250,000. Money market funds, on the other hand, are investment accounts, most likely sold by your broker, and are regulated by the Securities and Exchange Commission (SEC) instead. Money market funds invest in highly liquid cash and cash equivalent securities that typically mature within 13 months. Additionally, money market funds charge expense ratios, or management fees, that are charged as a percentage of your fund.

Money market accounts often pay much lower interest rates than CDs do. CDs allow you to protect your investments over the years by locking in today’s high rates in a long-term account, while also staying flexible for any potential rate increases with your shorter-term accounts. The interest rate on a money market account can change right away, at the bank’s discretion.

Another key difference between a money market account versus a CD is accessibility. While money market accounts allow your money to keep growing while still remaining accessible, you’ll likely face a pretty heavy penalty — typically three to six months of interest — if you need to access your CD funds before it matures.