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Updated on Wednesday, February 10, 2021
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.
You can do much better than the current money market average of 0.172% APY if you’re willing to break with traditional brick-and-mortar banks. Opening an MMA at the bank around the corner, for example, may not yield more than 1.00% APY, while an internet-only bank might offer a rate of 2.00% APY or higher. With a rate like that, you can boost your savings by a wide margin.
With so many options out there, it can seem daunting to search for a new bank account. We’ve made it easier for you by rounding up the best money market accounts out there. We searched through over 12,000 banks and credit unions to find the money market accounts paying the highest interest rates. We also looked at an account’s minimum requirements and fund accessibility.
Overall, we found that internet banks consistently beat the competition. You might not recognize all their names — new online banks are continuing to crop up — but if it’s high interest rates you’re looking for, it might be worth branching out.
MagnifyMoney’s Best Money Market Accounts for February 2021
Here are our favorite accounts for February 2021:
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1. Affinity Plus Federal Credit Union — 1.00% APY, $0 minimum to earn APY
Affinity Plus Credit Union is a Minnesota-based credit union, but even if you do not live in the North Star State, you can take advantage of the attractive financial products they offer. Affinity Plus Credit Union offers a slew of money market accounts, but its Superior Money Market Account stands out with a 1.00% APY on balances up to $25,000. Additionally, there is no minimum deposit required and no monthly maintenance fees. Balances over $25,000 earn a 0.50% APY.
To earn the higher 1.00% APY, you must have a minimum direct deposit of $500 per month (which could come from payroll, Social Security or unemployment) to any Affinity Plus checking, savings or money market account, and also be enrolled in digital statements. If you don’t meet those requirements, you’ll earn 0.10% APY.
Membership to the credit union is open to anyone who makes a one-time dues payment of $25 to the Affinity Plus Foundation.
2. Latino Community Credit Union — 0.50% APY, $500 minimum deposit
The Latino Community Credit Union is currently offering an attractive rate of 0.50% APY on its Basic money market account. This product requires a minimum deposit of $500, and there is no monthly maintenance fee. The credit union also offers not-for-profit money market accounts and micro business money market accounts.
Based in North Carolina, membership to Latino Community Credit Union is open to anyone who joins the Latino Community Development Center for a one-time family membership fee of $10.
3. Axos Bank – 0.60% APY, $1,000 minimum deposit to open
Internet-only bank Axos Bank boasts a 0.60% APY on its High Yield Money Market Account, requiring a reasonable minimum deposit of $1,000 in order to open. However, there is no minimum required in order to earn the stated APY. Additionally, there is no monthly maintenance fee associated with this account.
4. National Cooperative Bank – 0.60%, $100 minimum deposit to open
The National Cooperative Bank is currently offering a 0.60% APY on funds 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 one location in Ohio, its services are available to consumers nationwide, online.
5. Chevron Federal Credit Union – 0.50%, $2,500 minimum in order to earn APY
The Chevron Federal Credit Union is currently featuring an attractive rate of 0.50% on funds in its MarketEdge Money Market Savings account for balances of at least $2,500. Meanwhile, balances under $2,500 earn an APY of 0.30%.
Membership to the Chevron Federal Credit Union is open to anyone who also joins either the Contra Costa County Historical Society or the Navy League of the United States.
6. Prime Alliance Bank – 0.60% APY, $10,000 minimum balance to earn APY
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.
Prime Alliance Bank will provide an ATM card if you request one. This account can be managed online or via the bank’s mobile app.
7. Spectrum Credit Union – 0.50% APY, $2,500 minimum balance to earn APY
Spectrum Credit Union’s MarketEdge Money Market account is offering a 0.50% APY on balances of at least $2,500, while balances below $2,500 earn a lower APY of 0.30%. Dividends for this account are compounded daily and credited to your account monthly.
Spectrum Credit Union opens its membership to anyone who joins the Contra Costa County Historical Society or the Navy League of the United States.
8. BankDirect – 0.50% APY, $10,000 minimum balance to earn APY
BankDirect’s Money Market Plus account features a 0.50% APY on balances of at least $10,000. However, balances below that amount do not earn any APY at all. There is a minimum of $500 required to open this account. Interest is compounded daily.
BankOne is the online division of Texas Capital Bank, and its products are available online, nationwide.
9. CFG Bank — 0.56%APY, $1,000 minimum balance to earn APY
CFG Bank is a privately owned and operated bank headquartered in Baltimore. While the bank only has a handful of locations scattered throughout Maryland, it offers many of its products online, nationwide.
Currently, CFG Bank is featuring a 0.56% APY on its High Yield Money Market account. However, this rate is only available for new funds. Additionally, there is a minimum deposit of $1,000 required to open and earn the APY.
10. Ally Bank – 0.50% APY, $0 minimum balance to earn APY
Ally Bank is a very popular internet-only bank. If you’re able to keep a minimum daily balance of $5,000, you’ll be rewarded with a 0.50% APY. 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.
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.
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.