Updated February 7, 2020
If you’re looking to save more money beyond your regular savings account, consider adding a money market account 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.
Like most deposit accounts, the rate on money market accounts has grown over the past few years, up from 0.188% APY in 2016 to 0.372% APY in January 2020. Savings account rates have also increased, but still averaged only 0.272% APY in January 2020.
You can do much better than a 0.372% APY on a money market 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.
If you were to put $50,000 into an MMA earning 0.04%, you would earn only $20 in interest over a year. Put that same starting amount into an online bank account at 2.00%, and you’d earn $1,000 in interest over a year.
With so many options out there, it can seem daunting to search for a new bank account with a potentially new bank. We’ve made it 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 good to branch out since online banks are the way to go. Here are our favorite rates for January 2020:
1. Discover Bank – 1.45% APY, $2,500 minimum deposit to open
Discover Bank has become a household name for many financial products, and its money market account is no exception. Currently, Discover is offering a 1.45% APY on its Money Market account for balances under $100,000. Balances above $100,000, though, will earn an APY of 1.50%. There is a minimum opening deposit of $2,500 for Discover’s Money Market account, but after that, there are no minimum balance fees.
2. Favorite Online Package: Ally – 0.75% 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 0.75% APY. If you’re able to keep a minimum daily balance of $25,000 the APY increases to 0.75%. 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 are the best money market accounts listed by APY regardless of minimum balance:
3. High Rate: Sun East Federal Credit Union, 2.05% APY, $5,000 minimum balance to earn APY
Sun East Federal Credit Union was established in 1949 by employees of the Sun Oil Company. These employees wanted to help each other out financially and decided to do so by establishing their own credit union. Since its establishment, the credit union has grown to acquire over $634 million in assets. Anyone can become a member of this credit union by donating $10 to the Sun East Charitable Foundation. You can also qualify by your location, family members, or through employers.
Once you become a member of this credit union, you’ll be able to open the Max-Yield Money Market Account. This account is currently offering a 2.05% APY that is guaranteed for 13 months. You’ll need to maintain a balance of at least $5,000, but the balance can’t exceed $250,000. Keep in mind that after the 13-month promotional period ends, the account will turn into the Classic MMA. The Classic MMA earns a much lower APY. If you aren’t able to maintain the minimum balance of $5,000, you’ll incur a monthly fee of $10. This account does come with check-writing capabilities. You’re able to manage this account online as well as through the credit union’s mobile app.
4. High Rate: Affinity Plus Federal Credit Union, 2.02%APY, $0 minimum balance 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. Membership to the credit union is open to anyone who makes a one-time dues payment of $25 to the Affinity Plus Foundation.
Affinity Plus Credit Union offers a slew of money market accounts, but its Superior Money Market Account stands out, with a 2.02% 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 1.00% APY.
To earn the higher 2.02% 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.
5. High Rate: BankUnitedDirect, 2.00% APY, $2,500 minimum balance to earn APY
BankUnitedDirect is an online banking division of BankUnited, N.A., itself a subsidiary of BankUnited, Inc. BankUnitedDirect is based in Florida and has $33 billion in total assets as of September 2019. BankUnitedDirect is accessible online, including on its mobile app.
In addition to its Certificates of Deposit, BankUnitedDirect offers a competitive Money Market Account. The account requires a $2,500 minimum deposit to get started. Then you can start earning at its 2.00% APY. Interest is compounded and credited monthly. You must maintain a $2,500 minimum balance to avoid a $15 monthly fee. You can order checks associated with a Money Market Account by calling BankUnitedDirect.
6. High Rate: MemoryBank – 2.00% APY, $50 minimum to open
MemoryBank is the online division of Republic Bank & Trust Company. While this online division launched in 2016, its parent company has been around since 1982 and has over $5 billion in assets. Currently, MemoryBank is offering a 2.00% APY on its Online Money Market Account. You’ll need a minimum of $50 to open the account, but you won’t need to maintain this amount to earn the APY. The account doesn’t come with a monthly service fee, but it also doesn’t have check writing capabilities or ATM access. MemoryBank does have a mobile banking app to help you manage your account on-the-go.
7. High Rate: Prime Alliance Bank – 1.97% APY, $10,000 minimum balance to earn APY
Prime Alliance Bank was established in 2004 and has grown to acquire over $455 million in assets. The bank is currently offering a Personal Money Market account with an APY of 1.97%. You’ll need to deposit and maintain a balance of at least $10,000 in order to earn this APY. If your balance drops below $10,000, the APY will drop to 1.87%. 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.
8. High Rate: Quontic Bank – 1.65% APY, $5,000 minimum balance to earn APY
Quontic Bank was established in 2005 and has acquired over $394 million in assets. This online bank is currently offering a money market with some high rates if you’re able to deposit at least $5,000. There is a minimum deposit requirement of $500 and if your balance remains at that amount, you’ll earn 1.55% APY. If you’re able to maintain a balance between $5,000 – $99,999.99, you’ll earn 1.65% APY. If you’re able to maintain balance of $100,000 or more, you’ll earn 1.76% APY. There aren’t any monthly fees. The account does come with a Mastercard Debit Card, which you can use at any Allpoint or MoneyPass ATM at no charge. If you happen to have a Quontic or Citi branch in your area, you’ll also be able to use those ATMs at no charge. Quontic Bank has a mobile banking app that allows you to access the account wherever you are.
9. High Rate: Pacific National Bank – 1.95% 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 $499 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 1.95%. 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.
10. Guaranteed Rate Through 6/30/2020: Customers Bank – 1.95% APY, $25,000 minimum deposit and balance to earn APY
Customers Bank was founded as Century Bank in 1997 and rebranded in 2011 to the name we know today. The bank has acquired over $10 billion in assets since it opened its doors. If you have a minimum of $25,000 to deposit and are looking to save that money, Customer Bank’s Ascent Money Market Savings Account may be just what you need. If you’re able to fund the account within 30 days of application approval, you lock in a minimum APY of 1.95%. Customers Bank is currently guaranteeing this rate through June 30, 2020. The language on the Ascent page states, “The minimum rate of 1.95% APY is guaranteed thru June 30, 2020.” This implies that if the bank increases the rate on this account, customers will benefit from the rate increase. There isn’t a monthly service fee and there isn’t an excess transaction fee if you happen to make more than six transactions in a statement cycle. You will simply receive a warning letter each time you exceed six transactions and the bank will close your account if you’re sent a third warning letter. The bank encourages accountholders to use this account to hold savings, so there aren’t any check-writing capabilities or ATM/debit cards issued with this account. The bank also limits ACH transfers to $5k per day and $50k per statement cycle. If you choose to wire money from an external account to fund this account, the bank will waive the $10 incoming wire transfer fee. The guaranteed rate makes this account a great option for true savers with at least $25,000 to deposit.
11. High Rate: CNBBankDirect – 1.91%APY, $25,000 minimum balance to earn APY
Established in 2008 as a division of Citizens National Bank, CNBBankDirect’s Premium Money Market account currently boasts an impressive APY of 1.91% on balances over $25,000. That rate is applicable to balances ranging from $25,000 to a whopping $2 million. There is a minimum balance of $25,000 required to open an account, and while it does not charge a monthly service fee, this account does require a minimum balance of $1 in order to keep the account open.
Citizens National Bank has roots dating back to 1920. Headquartered in Bluffton, Ohio, the bank has assets totaling over $840 million and nine physical locations throughout the state of Ohio.
12. 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 1.00% APY. As the balance increases, the APY decreases to the following:
- $5,000.01-$10,000: 0.45%
- $10,000.01-$50,000: 0.30%
- $50,000.01-$100,000: 0.30%
- $100,000.01-$250,000: 0.25%
- $250,000.01+: 0.25%
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.
What is a money market account?
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. Because the name of this deposit product has the word market in it, you may assume a money market account is some kind of investment product, but it’s not.
One of the features that differentiates a money market account from a savings account is that institutions generally make it easier to access deposited funds by offering checks and ATM cards. Note that some institutions are starting to provide them for savings accounts, too. Keep in mind that much like a savings account, money market accounts are governed by Regulation D, the Federal Reserve rule stating you can only make a maximum of six withdrawals via check or debit card. Additional withdrawals may incur a fee from your bank or credit union.
It’s also important to understand that money market accounts are different from money market funds. In the 1980s, shoulder pads and hair weren’t the only things that were big: Yields on money market funds were both low-risk and offered a good rate of return. To help out the banking sector, Congress passed the Garn-St Germain Depository Institutions Act of 1982, which allowed banks to offer a new type of savings account — money market accounts — with an interest rate based on those offered in money markets.
What to consider before opening a money market account
Before you get bogged down in the details, let’s take a look at some quick pros and cons of a money market account.
Who money market accounts are best for
Now that you know the basics of a money market account, should you get one? They’re 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/debit card or by writing a check.
Savings accounts vs. money market accounts
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.
For example, one of the best savings accounts, Ally’s Online Savings account, offers a 1.60% APY while its money market account earns at a mere 0.75% APY (on most balances). So if it’s high interest rates you’re after, be sure to compare accounts across the board rather than turning immediately to a money market account. Just be sure to keep your balance limits in mind when shopping around.
What often separates money market accounts from savings accounts is their check-writing abilities or issued ATM/debit cards. This provides easier access to your money especially if you have larger balances you’re saving for a bigger purchase. Not all money market accounts offer these features, though. Furthermore, money market accounts are still savings vehicles, so they’re also limited to six outgoing transactions per month, like transfers and withdrawals.
Read more about the differences between money market and savings accounts here.
CDs can offer higher rates than money market accounts
Savings accounts and money market accounts often pay much lower interest rates than CDs. Right now you can get a 1-year CD paying 2.15% APY (with only a $500 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 currently as high as 2.41%. Creating a CD ladder also allows 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.
If you need some savings more immediately, money market accounts are great places to keep that money— it’ll keep growing, while still remaining accessible. In contrast, should you need to access your CD funds before it matures, you’ll likely face a pretty heavy penalty, typically forfeiting three to six months of interest.
A money market account isn’t the same thing as a money market fund
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 instead. Money market funds invest in highly liquid cash and cash equivalent securities that typically mature within 13 months.
As an 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. Still, money market funds can end up with a lower return than those you see from the money market accounts listed in this article. Since money market fund returns are dependent on the market and the Federal Reserve Rate, it’s important to keep an eye on the current interest rate climate to see whether investing in these funds are worth your time and money.
Money market funds charge expense ratios, or management fees, that are charged as a percentage of your fund (Vanguard’s is currently 0.16% as of Dec. 2018). You can also end up paying some transaction fees. It’s important to watch out for an account’s fees which can often lessen your total investment in the end. Like money market accounts, money market funds can also require a high minimum balance to open an account.
Most people compare the return of a money market fund (sold by their broker) to the interest rate paid by a traditional bank (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 without taking on the risk of market investments.