Find out which banks offer the best rates for money market accounts right now. As interest rates continue to fall following the Federal Reserve’s recent rate cuts, it’s more important than ever to make sure you’re getting a competitive rate on your savings. One option you may want to consider is a money market account (MMA).
Wondering where to find the best rates for money market accounts today? Here’s what you need to know.
From a historical perspective, interest rates on money market accounts have been quite high. The national average interest rate for money market accounts is just 0.56%, according to the FDIC, but the highest rates on money market accounts pay between 3.5% and 4% APY, similar to the rates offered on high-yield savings accounts.
Here’s a look at some of the highest MMA rates available today:
Deposit account rates, including money market rates, are tied to the federal funds rate. This is a range of interest rates set by the Federal Reserve and is what banks charge each other for overnight loans. When the Federal Reserve increases the federal funds rate, deposit account rates generally increase. And conversely, when the Federal Reserve lowers its rate, deposit rates fall.
Between July 2023 and September 2024, the Federal Reserve maintained a target range between 5.25% and 5.50%. However, as inflation cooled and the economy improved, the Federal Reserve cut the federal funds rate several times. As a result, money market rates began to decline.
Rates are expected to continue falling after the Federal Reserve’s last three rate cuts in 2025, meaning now could be the last chance for savers to take advantage of today’s higher rates.
Read more: Can you lose money in a money market account?
Given that rates on money market accounts are still high, these accounts are an attractive option for savers. Still, deciding whether it’s the right time to deposit money into a money market account also depends on your financial goals and broader economic conditions. Here are some key factors to consider:
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Liquidity needs: Money market accounts offer easy access to your money, as they often come with check-writing capabilities or debit card access (although there may be a limit on monthly withdrawals). If you need to keep your money accessible while still earning a decent return, a money market account could be ideal.
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Savings goals: If you have short-term savings goals or want to build an emergency fund, a money market account can provide a safer place for your cash, with better returns than most traditional savings accounts.
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Risk tolerance: For conservative savers who prefer to avoid the ups and downs of the stock market, money market accounts are attractive because they are backed by FDIC insurance and cannot lose principal. However, if you are saving for a long-term goal like retirement, riskier investments are needed to generate higher returns that will allow you to reach your savings goal.
With interest rates still high, now might be a good time to consider a money market account, especially if you’re looking for a balance of security, liquidity, and better returns than traditional savings accounts. Comparing rates from different institutions will help you find the best options available.
Today, TotalBank offers the highest account rate in the money market. This account pays 4.01%, which is more than seven times the national average.
In the current environment of falling interest rates, it is quite difficult to find a deposit account that pays 5%. Instead, you may want to investigate market investments, which carry more risk than money market accounts and other types of deposit accounts, but also offer much higher returns, on average.
Yes. As long as you open an account at a federally insured bank or credit union, your money market account will be safe from market risk. The only way your account can lose money is if you incur fees.