The best money market rates of March 2024 (2024)

Our picks at a glance

What are money market accounts?

A money market account functions like a savings account. You deposit your money with a bank or credit union, and the financial institution will hold on to it until you need it.

But, money market accounts have some checking account traits, too. With some money market accounts, you can write checks and make withdrawals with your debit card at an ATM. Your bank or credit union might limit the number of transactions you can make by debit card, check or transfer.

Typically, you will earn more interest when your funds are in a money market account instead of a checking account or traditional savings account — or even some high-yield savings accounts. And because money market accounts are liquid assets, you can access your money immediately in an emergency without penalties.

Why money market rates matter

Anytime you’re putting money in a bank account, you’ll want to know how much you’ll earn in interest. The same is true with a money market account.

It pays to compare an account’s APY — annual percentage yield — from one bank to another because rates can vary widely. Use an online calculator to determine how much you will earn at the end of a 12-month span, for example, noting whether your dividends are compounded on a daily or monthly basis. Spend some time shopping around for the best money market rates.

What is the difference between a money market account and a standard savings account?

Money market accounts are effectively enhanced savings accounts. Probably the biggest difference is that money market accounts usually offer check writing, something that savings accounts do not. Money market accounts may also offer ATM access, which some but not all savings accounts do.

Money market accounts generally offer yields competitive with or even exceeding savings accounts, but they may have higher minimum balance requirements. As online banks have dramatically changed the financial services landscape over the past decade or so, it’s worth looking into exactly what’s available to you in the ever-changing market.

Factors that influence money market rates

Money market account rates are guided by the benchmark short-term rates the Federal Reserve sets and overall economic conditions.

The Fed has raised rates 11 times since March 2022 in an effort to rein in inflation. That may be bad news for people who want a mortgage or a car loan and for those who carry credit card debt, but it’s good news for savers.

The higher the rate for borrowers, the higher the rate for savers.

Benefits of money market accounts

• High interest rates: Money market accounts typically earn more than traditional savings accounts.
• Liquid savings: You can access your savings in an emergency or for a large purchase in the future, but withdrawal limits may apply to your account.
• Low-risk investments: As with checking and savings accounts, FDIC-insured money market accounts are federally insured up to $250,000 per depositor, per insured bank for each account ownership category.

Who should get a money market account?

A money market account is best suited for individuals who want the best of both checking and savings accounts. In other words, if you want an account that allows you to write checks but that still pays you a yield over most checking accounts, a money market account might be a good choice for you.

Of course, most money market accounts have limitations, such as opening or minimum ongoing balance requirements, and some may charge fees.

Steps to choose a money market account

As with any financial decision, it pays to do a little research before you make a decision regarding which money market account to use. Here are some of the top factors you should consider:

Fees

Thanks in part to the rise in online banks, fees for money market accounts have been coming down for years, and many are now available without any monthly maintenance fees at all. But there may be other fees associated with a money market account that you’ll want to take into account, such as check writing fees, ATM fees, wire transfer fees and overdraft fees.

Functionality & accessibility

The best money market accounts offer a wide range of services and benefits, from high interest rates to check writing and ATM access. Finding an account that provides what you need out of it is a critical step in picking the right one.

Yield

Yield shouldn’t necessarily be the single most important factor you consider. However, once you’ve narrowed down your choices to low-cost options that provide all the features and benefits you require, the one with the highest yield will likely be the best choice.

Opening a money market account

After comparing your options and choosing a money market account, you’re ready to open your account. The exact steps will vary by financial institution, but here’s an overview of the general process:

Apply online, by phone or at a branch: Your application will require personal information, such as your name, birthdate, address and Social Security number. You’ll have to indicate whether you want to add a joint account owner and a beneficiary.

Complete verification requirements: You may have to provide copies of ID or other documents to confirm information in your application. A utility bill or lease, for instance, may be used to verify your name and address.

Fund your new account: When you open the account, you may have to make an initial deposit to meet a minimum funding requirement. This may also be necessary to access higher APY rates.

What are the best ways to use a money market account?

A money market account can be a good tool for growing your balance and working toward short-term savings goals, such as:

• Building an emergency fund: Experts recommend setting aside three to six months’ worth of living expenses.
• Saving for a down payment on a car or a home: If you’re saving for a big purchase, the interest you’ll earn on a money market account can add up quickly. When you’re ready to buy, you can withdraw funds without penalty.
• Paying for a vacation or wedding: Use a money market account to save gradually for a big trip or event.

Alternatives to money market accounts

Since money market accounts combine the best features of checking and savings accounts, they have many different types of competitors. Here’s a look at how money markets compare to the alternatives.

Regular MMAs vs. jumbo MMAs

Jumbo money markets require a higher initial deposit than regular money market accounts, typically $100,000 or more. Minimum maintained balances are also usually higher. However, in exchange, jumbo money markets usually pay a higher interest rate.

MMAs vs. NOW accounts

Negotiable order of withdrawal accounts are deposit accounts that owners can write drafts against, somewhat like a money market account. However, they have essentially phased out of the banking world ever since the 2008 passage of the Dodd-Frank Act, which allowed other demand accounts to pay interest. They can also be less liquid than money market accounts as banks have the right to require at least seven days advance notice before they can release your funds.

MMAs vs. CDs

Both money market accounts and CDs pay interest and carry FDIC or NCUA insurance as long as the financial institution is federally insured. The main difference between them is in their liquidity. With a money market account, you can access your funds at any time, typically through writing a check or perhaps using an ATM card. But a CD has a fixed maturity date. If you take money out of your CD before it matures, you’ll usually have to pay an early withdrawal penalty, forfeiting some of your interest.

MMAs vs. savings and checking accounts

Money market accounts are something of a hybrid between savings and checking accounts. Depending on your needs, any of the three might be the right match for you. While money market accounts generally offer check-writing and pay interest, they often have higher minimum balance requirements than either checking or savings accounts. They may also have limitations on the number of checks you can write per month, and some don’t offer ATM access.

Are money market accounts safe?

Money markets are covered by the same federal insurance as checking accounts, savings accounts and CDs. This means that all your accounts of the same ownership category at the same bank are insured for up to $250,000. If you have more than $250,000 to deposit at a single bank, you might consider spreading it out over more than one institution so that you can avail of additional federal insurance.

Methodology

Our team of experts at CNN Underscored Money analyzed dozens of accounts from more than 30 financial institutions to determine the rankings for the best money market accounts. This included accounts from a mix of traditional banks, online banks and credit unions that are available nationally. We ranked each account on 13 data points across six categories.

Here are the categories we analyzed and how we weighted each:

APY (50%)

The amount of interest you earn on your savings is the most important part of choosing a money market account for many consumers, so we weighted this highest of any factor.

Fees (10%)

Fees are a critical factor to consider with your money market account because they can eat away at any interest earnings, especially if an account has a high monthly maintenance fee.

Customer experience (10%)

While you’ll likely deal with your bank less often with a money market account than you will with a checking account, it’s still important to have a bank that’s trustworthy and easy to reach when you need help.

Digital experience (10%)

You’ll want a bank with a usable app and plenty of online features so that it’s easy to bank from anywhere.

Minimums (10%)

A high minimum deposit makes a money market account less accessible, so we rewarded accounts that more people can use. We also rewarded accounts that don’t make you carry a minimum balance to avoid fees.

Access (10%)

Many people select a money market account for features like a debit card and check-writing privileges, giving them easier access to their funds.

We also considered several other factors like account features and tier structures to earn APY.