February 13, 2024 — Rates Move Downward – Forbes Advisor – Earn Charter

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Current Money Market Rates

The current average money market rate is 0.58%, while the highest rate is up to 5.13%.

Here are today’s money market account rates:

  • Average APY: 0.58%
  • Highest Rate: 5.13%

Source: Curinos. Data accurate as of February 12, 2024. Rates are based on a $10,000 minimum deposit amount.

What Are Money Market Rates?

Interest rates for money market savings accounts are often called money market rates. These earnings are typically credited as a percentage of your savings balance on a daily or monthly basis. Money market rates change every day. Banks and credit unions that pay tiered rates often reserve the best rates for the largest balances.

An interest rate represents the earnings made solely on your account balance. A yearly rate of return that factors in compound interest is called your annual percentage yield (APY). Compound interest is interest that accrues on the interest as you earn it.

How Does a Money Market Account Work?

Money market accounts are interest-bearing deposit accounts that work similarly to savings accounts. You deposit money whenever you have some to spare and it grows more interest the longer you leave it alone. These accounts are insured by the FDIC for banks and the NCUA for credit unions up to $250,000 per depositor. Money market accounts offer convenient fund accessibility, often including checks and debit cards, though you might be limited to six monthly transactions.

Compared to regular savings accounts, money market accounts usually offer higher interest rates. However, they tend to require higher minimum deposits and balances to earn these.

How To Open a Money Market Account

Before opening a money market account, take some time to check out what different banks offer. In addition to shopping around for the highest rates, you’ll want to compare minimum balance and deposit requirements, monthly fees and withdrawal limits. Look for an account that offers competitive rates you can easily qualify for.

You can typically submit an application for a money market account online or in person at a branch. The application will ask you to provide basic information, including your name, address, Social Security number, employment status and income. You will probably need to present a government-issued ID as well. After being approved, you can make your first deposit.

Money Market Account vs. Savings Account

Money market accounts work like savings accounts in some ways and like checking accounts in others. Similar to savings accounts, money market accounts let you deposit funds as you please and earn interest on your savings. Both are highly liquid and safe deposit accounts that may have withdrawal restrictions, balance requirements and monthly fees.

Similar to checking accounts and unlike most savings, money market accounts can come with debit cards, checks or both. This makes them a little more flexible than the typical savings account, but money market accounts may limit transactions and aren’t intended for daily use. Money market accounts also tend to have higher fees and deposit and balance requirements.

Is a Money Market Account Worth It?

A money market account is worth it if you have the funds to meet deposit and balance requirements, and you won’t have to pay many fees. When you need easy access to your money but you plan to save it for now, money market accounts are a low-risk option for earning interest. They are also FDIC- or NCUA-insured.

If you can’t meet minimum balance requirements to earn the best rates or if a money market account charges fees that will deplete your earnings, it may not be worth it. Consider other savings options if you’re looking for lower minimum requirements, or explore interest checking accounts if you need unrestricted access to your cash.

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