Average Money Market Account Interest Rate

The interest rate on money market accounts is 0.62% on average as of August 2023, and rates range from below 1% to just over 5%. Money market rates are variable and tend to be higher than traditional savings account rates but may be lower than returns from riskier investments like stocks or bonds.

Money market account rates reached a high of 16% in the 1980s due to inflation and have averaged 0.15% from 2013 to 2023. In addition to financial institution policies and market conditions, rates vary depending on the account's balance and how often interest compounds.

You can find notable examples of money market accounts with relatively high annual percentage yields (APYs) below.

Money Market Accounts with High APYs

*Intro rate for the first year. After that, 3.75%+ APY.

Note the annual percentage yield (APY) for an account includes the effect of compounding and reflects the total earnings you can expect over the course of a year.

You can compare the best money market accounts here at WalletHub to find the right fit for your financial needs.

Money market accounts are safe because they're almost always insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) up to $250,000. So, even if the bank or credit union fails, your money is not lost.

Although money market accounts do not yield as much as some other investments, they also do not carry the same inherent risks. With a money market account, your principal always remains intact, which...

A money market account is a type of savings account that usually comes with certain checking-account features, like a debit card and checks, while often providing higher interest rates than many standard savings accounts. In exchange for these features, the number of transactions you can make per month will be limited. The minimum balance required to avoid a monthly fee will often be higher than with other bank accounts, too.

Like savings and checking...

The pros of a money market account are relatively high interests, FDIC or NCUA insurance, principal protection, and liquidity. The cons are minimum balance requirements, transaction limits, lower returns compared to other investments, and inflation risk. It's imported to weigh the risk versus the rewards to determine if a money market account can help you achieve your financial goals.  

Pros and Cons of a Money Market Account

Yes, a money market account is a type of savings account. Money market accounts tend to have higher minimum balance requirements than traditional savings accounts, but money market accounts offer higher interest rates and usually allow you to pay your bills, use a debit card and write checks.

You can compare the best money market accounts and the best traditional savings accounts here at WalletHub. You can also learn more below.

Types of Savings Accounts

• Traditional savings account
• ...

The minimum balance requirement for a money market account could be less than $1,000 or up to $25,000+, depending on the financial institution. Generally, money market accounts tend to have higher minimum balance requirements than regular savings accounts.

Examples of Minimum Balance Requirements for Money Market Accounts

You can open a money market account by visiting a bank or credit union in person or online, submitting an application with your personal information, ID and proof of address, then making your initial deposit. Depending on the bank, you can make your initial deposit with cash, an electronic transfer, or a check. Opening a money market account is very similar to opening a traditional savings or checking account.

To find the best money market account, consider the minimum...

Nearly all of the largest banks have money market accounts (MMAs), a very popular and commonly used type of savings account. Most smaller banks, online banks, and credit unions also offer money market accounts to both consumers and businesses.

Top Banks with Money Market Accounts

• Ally Bank
• Bank of America
• BMO
• Capital One
• Citibank
• Citizen's Bank
• First Citizens Bank
• Goldman Sachs
• PNC Bank Premiere
...

First off, a "money market" can come in two different versions.  A Money Market Account, and a Money Market Mutual Fund.

A money market account is an interest-bearing account that typically pays a higher interest rate than a savings account, and which provides the account holder with limited check-writing ability. A money market account thus offers the account holder benefits typical of both savings and checking accounts. This type of account is likely to require...

The downsides of a money market account (MMA) can include lower investment returns, potential fees, limited transaction flexibility, and interest rate fluctuations. Before deciding on an MMA, it's important to consider these potential drawbacks:

1. Lower returns than other investments: Offer more than standard savings accounts, their returns generally lag behind other investment options like stocks or bonds. This means your money might not grow as quickly, especially when factoring in inflation.
2. Potential fees: Some...