Between March 2022 and July 2023, the Federal Reserve raised its benchmark rate 11 times. As a result, money market account (MMA) interest rates have risen sharply.
However, the Fed cut the federal funds rate by 50 basis points in September and by another 25 basis points in November. So, deposit rates – including money market account rates – began to fall. It's more important than ever to compare MMA rates and make sure you earn the most money on your balance.
THE national average rate of money market accounts amounts to 0.60%, according to the FDIC. That may not seem like much, but consider that just two years ago it was just 0.23%, reflecting a big rise in a short period of time.
This is largely due to monetary policy decisions by the Fed, which began raising its benchmark rate in March 2022 to combat soaring inflation. In fact, the Fed has raised rates 11 times. But it ultimately lowered its benchmark rate in September and November, leading to lower deposit account rates.
Despite this, some of the best accounts currently offer over 5% APY. Since these rates may not last much longer, consider opening a money market account now to take advantage of today's high rates.
Here's a look at some of the best MMA fares available today:
Check out our selection of the 10 best money market accounts available today>>
Additionally, the table below highlights some of the best savings and money market account rates available today from our verified partners.
The amount of interest you can earn on a money market account depends on the annual percentage rate (APY). This is a measure of your total earnings after one year taking into account the base interest rate and how often interest compounds (interest on money market accounts typically compounds daily).
Let's say you invest $1,000 in an MMA at the average interest rate of 0.60% with daily compounding. After a year, your balance would reach $1,006.02 – your initial deposit of $1,000, plus just $6.02 in interest.
Now let's say you choose a high-yield money market account that offers a 5% APY. In this case, your balance would increase to $1,051.27 over the same period, which includes $51.27 in interest.
The more you deposit into a money market account, the more likely you are to win. If we take our same example of a money market account at 5% APY, but you deposit $10,000, your total balance after one year would be $10,512.67, meaning you would earn $512.67 of interests.
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