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Updated on Saturday, May 1, 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.
The current average money market rate is 0.10%, 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 searched through over 12,000 banks and credit unions, looking for the highest interest rates, as well as considering 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 continually 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 May 2021
Here are our favorite accounts for May 2021:
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1. Axos Bank – 0.60% APY, $1,000 minimum balance 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.
2. 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.
3. Prime Alliance Bank – 0.60% APY, no minimum balance to open
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.
4. All America Bank – 0.50% APY, $500 minimum balance to open
All America Bank is currently offering an APY of 0.50% on balances up to $50,000 on its Mega Money Market account. After $50,000, you’ll earn an APY of 0.25%. There aren’t any monthly fees with this account. All America Bank allows six free transactions per month, after which a $5 fee applies to each additional debit.
All America Bank was established in 1969 and is headquartered in Oklahoma City.
5. Northern Bank Direct — 0.50% APY, $5,000 minimum balance to open
Northern Bank Direct currently offers a 0.50% APY on its Money Market account with a minimum opening deposit of $5,000. The account has no monthly service charge. Customers can access their money market account funds through ATM, electronic transfer, wire and check writing.
Northern Bank Direct is an online division of Northern Bank, which was founded in 1960 and is headquartered in Woburn, Mass. This internet-only bank offers its products to its customers nationwide.
6. Ally Bank – 0.50% APY, no minimum balance to open
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.
7. First Internet Bank – 0.50% APY, $100 minimum balance to open
First Internet Bank boasts a robust rate of 0.50% APY on its Money Market Savings, earning more than seven times the national average. 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 $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.
8. Nationwide by Axos – 0.50%, $1,000 minimum balance to open
Nationwide by Axos is currently featuring an attractive rate of 0.50% on funds in its Money Market Plus account. You need $1,000 to open the account and to avoid the monthly maintenance fee of $8. The account includes mobile banking and mobile deposits.
Nationwide by Axos Bank was established in 2000. All banking products are provided through Axos Bank, which also provides the account’s FDIC insurance.
9. Georgia Banking – 0.45% APY, $100 minimum balance to open
Georgia Banking’s Platinum Money Market account features a 0.45% APY on all balances. You’ll need at least $100 to open an account. The bank charges no monthly maintenance fee and requires no minimum balance to earn interest.
Established in 2001, Georgia Banking Company has two branch locations in Georgia.
10. Sallie Mae Bank – 0.40%, no minimum deposit to open
Sallie Mae Bank’s Money Market account offers a competitive 0.40% APY, which is compounded daily and paid monthly. The bank charges no monthly service fee, nor is there a minimum balance required to earn the account’s APY.
Sallie Mae Bank is a financial institution affiliated with Sallie Mae, the company widely known for its student loan business. It is an internet-only bank offered nationwide. In addition to its money market account, the bank offers savings accounts and certificates of deposit (CDs).
Money market account FAQ
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.