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The best money market rates right now:

*As of June 2020, the national average APY on money market accounts is 0.09% according to the FDIC.

Banks and credit unions are battling it out to offer higher rates and better terms for people who want to use a money market account. That’s great news for savers, because you have several strong options for the best account to build your savings.

It’s important to note that, unlike certificates of deposit (CDs), you do not lock in a fixed interest rate when you open a money market account. The annual percentage yield (APY) is variable, since it’s based on what the Federal Reserve does. So while it’s smart to look at interest rates when comparing money market accounts, it’s not the be-all and end-all.

Below you’ll find our picks for the best money market accounts right now. Each of these accounts is insured by the FDIC and appropriate for modest and super savers alike. Our top picks are free of monthly service fees, with the exception of CFG Bank, which waives its fee if you maintain an account balance of $1,000. Users can access each of these accounts online or with a mobile app.

Why it stands out: This is a reverse-tiered account that pays a higher rate for lower balances. If your account balance stays under $25,000, you’ll keep earning the highest rate possible. Affinity Plus also provides you with both paper checks and a debit card, giving you easy access to your savings.

Rate: 0.75% to 2.02% APY

Minimum opening deposit: $0

What to look out for: Interest. You must set up monthly direct deposits of at least $500 and sign up for digital statements to qualify for a competitive rate — otherwise, you’ll earn 0.10% APY. It’s also worth noting that interest compounds monthly, while many competitors’ rates compound daily, giving you the opportunity to build more wealth.

Why it stands out: Sallie Mae pays a competitive rate, and the bank doesn’t require an opening deposit. Sallie Mae also sends paper checks for you to access your money.

Rate: 1.10% APY

Minimum opening deposit: $0

What to look out for: No debit card. Although you’ll receive paper checks, you won’t get a debit card with this money market account.

Why it stands out: With CIT Bank, you’ll earn the same rate regardless of how much money is in your account, and there’s no minimum balance requirement.

CIT Bank’s minimum deposit of $100 is lower than many competing money market accounts’ requirements, and it doesn’t charge a monthly service fee. You’ll pay $10 if you exceed six transactions per month and $25 if you overdraft, but these amounts are pretty standard for money market accounts.

You can link your CIT Bank money market account with PayPal and Zelle to make payments. 

Rate: 1.06%

Minimum opening deposit: $100

What to look out for: No check writing or debit card access. You can make payments from your account digitally through sites such as Zelle and PayPal, but it might be inconvenient to not be able to write a check, pay with a card, or withdraw money from an ATM.

Why it stands out: While some money market accounts offer higher rates for higher balances, Premier Members Credit Union takes the opposite approach — it rewards people who have lower balances with higher rates. Premier Members also doesn’t require a minimum balance, and it includes check-writing privileges.

Rate: Premier Members Credit Union’s reverse-tiered rates are as follows:

• $0 to $2,000: 2.00% APY
• $2,000.01 to $5,000: 1.10% to 2.00%
• $5,000.01 to $10,000: 0.72% to 1.10%
• $10,000.01 to $50,000: 0.34% to 0.72%
• $50,000.01 to $100,000: 0.30% to 0.34%
• $100,000.01 to $250,000: 0.21% to 0.30%
• More than $250,000: 0.15% to 0.21%

Minimum opening deposit: $5

What to look out for: Account balance. You may start with a low balance and earn a high rate, but if your account balance grows substantially, you could end up earning less than you would with a different company.

Why it stands out: Northern Bank Direct pays one of the highest rates in the industry for money market accounts, and it pays the same rate for all balances up to $250,000. You’ll also get paper checks and a debit card.

Rate: 1.25% APY

Minimum opening deposit: $5,000

What to look out for: Minimum opening deposit. The $5,000 initial deposit is higher than what many banks require.

Why it stands out: You’ll earn Prime Alliance’s highest rate with a balance of $10,000 or more, but the lower-tiered rate is still very competitive. You can open a money market account with only $1, and there’s no minimum balance or monthly service charge.

Rate: 1.25% to 1.35% APY

Minimum opening deposit: $1

What to look out for: No debit card or paper checks. One of the main benefits of a money market account over a high-yield savings account is easier access to your funds — but with no card or checks, Prime Alliance Bank doesn’t really make it easier to tap into your savings.

Why it stands out: Many money market accounts offer a higher APY to accounts with higher balances. Typically, there’s a big difference between most companies’ highest and lowest rates. But CFG’s lowest rate is already higher than most competitors’ top rates. CFG’s best rate is one of the highest you’ll find today.

Rate: 1.15% to 1.25% APY

Minimum opening deposit: $1,000

What to look out for: Minimum opening deposit and account balance. You’ll need $1,000 to open a money market account with CFG. You’ll need to maintain this amount to earn interest and to avoid a monthly service charge of $10. Also, remember that money market account rates can fluctuate with the federal funds rate. Although CFG’s rate is the best now, that may not always be the case.

Why it stands out: VirtualBank’s main draw is its competitive interest rate. Its $100 opening deposit is also lower than what some banks require to open a money market account.

Rate: 1.25% APY

Minimum opening deposit: $100

What to look out for: Access to funds, monthly fee, and interest rate. VirtualOne doesn’t send you a debit card or paper checks. The bank also charges a $5 monthly fee unless you maintain a balance of $100 or more. Finally, VirtualBank compounds interest monthly, not daily, which means less money for you in the long run.

Other money market accounts accounts we considered and why they didn’t make the cut:

• TIAA Bank (Member FDIC) : This money market account offers a decent introductory APY , but its rate drops after the first year, depending on your balance, and it requires a $500 initial deposit.

• Synchrony Money Market Account (Member FDIC): This money market account comes with a debit card and paper checks, but the APY is relatively low.

• Capital One 360 (Member FDIC): Capital One doesn’t charge an excess transaction fee or overdraft fee, but you’ll earn a fairly low rate if your balance falls below $10,000.

• UFB Direct (Member FDIC) : You need a balance of at least $25,000 to earn UFB Direct’s highest APY, and you must make an initial deposit of $5,000.
• Investors eAccess (Member FDIC) : This money market account doesn’t require any initial deposit or minimum account balance, but its APY is slightly lower than more competitive money market accounts.
• BMO Harris (Member FDIC) : You’ll need to place an initial deposit of $5,000 and maintain at least that amount to earn any interest.
• Discover (Member FDIC) (Member FDIC) : This low-fee account offers higher rates than Capital One, but Discover requires a $2,500 initial deposit.
• State Farm (Member FDIC) : You’ll earn a given APY for the first year; after that, your rate will drop to about half that.
• Redneck Bank (Member FDIC) : This is another solid reverse-tiered option, but it requires a $500 opening deposit, and rates don’t go as high as Premier Members’ rates.
• BBVA (Member FDIC) : You’ll earn a mediocre APY, and pay a $15 monthly service fee if your balance is under $10,000.
• Ally (Member FDIC) : Ally doesn’t require an initial deposit, and it reimburses up to $10 per month in ATM fees; however, its APY is lower than some others on our list,
• Sun East Federal Credit Union (Member FDIC) : Sun East offers a low APY, and you’ll have to make and maintain an account balance of $2,500.
• Pacific National Bank (Member FDIC) : You’ll need an initial deposit of $5,000 to open this account; you’ll need to maintain a $5,000 balance to avoid monthly fees and $10,000 to earn interest.

Frequently asked questions:

Why trust our recommendations?

Personal Finance Insider’s mission is to help smart people make the best decisions with their money. We understand that “best” is often subjective, so in addition to highlighting the clear benefits of a financial product or account — a high APY, for example — we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don’t have to.

How did we choose the best money market accounts?

There are a lot of money market accounts out there. Through our research, we’ve found that the best money market accounts are offered by banks with a strong online presence and mobile access.

We reviewed money market accounts at nearly two dozen institutions to identify the strongest options. We also cross-referenced our list against popular comparison sites like Bankrate and NerdWallet to make sure we didn’t miss a thing. 

While interest rates are an important aspect of any money market account, several offer the same annual percentage yield (APY). To differentiate between them, we also considered minimum deposit and balance requirements, overdraft and excess transaction fees, ability to access funds, and any other standout features. 

Why open a money market account over a high-yield savings account?

Money market accounts typically make it easier to access your money than high-yield savings accounts. Many come with check-writing privileges, debit cards you can use at ATMs, or both. Money market accounts and high-yield savings accounts both offer more interest and nearly as much flexibility as traditional checking or savings accounts. 

Are you on the fence about whether to open a money market or high-yield savings account? You could choose a company and compare its money market and savings accounts. One may have a higher rate, lower initial deposit, or lower monthly fee. 

You may want to work with a specific bank or credit union, but it only offers either a high-yield savings account or a money market account, not both. This limitation could help you make a decision, too.

Are money market accounts worth it?

Yes — a money market account has very few downsides, if any. There’s no risk that you’ll lose money, your account is insured by the FDIC (usually up to $250,000, but up to $1 million in some cases), and it gives you a shot at beating inflation.

The only time a money market account may not be worth it is if you’re paying excessive maintenance fees that eat into your interest payments or you find yourself restricted by the monthly transfer limit or time it takes for your money to get to your checking account.

Which banks have the best money market interest rates?

Right now, the following banks offer the best money market interest rates:

• CIT Bank (Member FDIC) 
• Sallie Mae (Member FDIC)
• CFG Bank (Member FDIC) 
• Northern Bank Direct (Member FDIC) 
• Prime Alliance Bank (Member FDIC) 
• Premier Members Credit Union (Member FDIC), for savers with $2,000 or less
• UFB Direct (Member FDIC), for savers with at least $25,000
• Affinity Plus Federal Credit Union (Member FDIC), for savers with less than $25,000
• VirtualBank

However, rates fluctuate along with the federal funds rate, so banks that offer the highest APY now might not down the road, and ones with lower rates now could hike their rates later.

Generally you’ll find the best interest rates at online banks. If you’re more comfortable banking with a brick-and-mortar, you can usually open a money market account there, too — just know that you may not be getting the best possible interest rate.

How often do money market account rates change?

Interest rates on money market accounts closely follow the federal funds rate. That is to say, rates are variable and can change multiple times per year at the whim of the Federal Reserve. 

The Fed meets eight times a year and decides whether to increase, decrease, or maintain interest rates. If the Fed cuts rates, the APY on your savings account can drop within days. When rates are lower, you won’t earn as much interest on your savings. But that doesn’t mean you shouldn’t save at all. When interest rates inevitably go back up, you’ll see a greater return on your money than if you started from scratch. 

Because the Fed spent several years raising rates since the Great Recession, it cut interest rates three times toward the end of 2019 in an effort to regulate the economy and side step another recession, and it’s already slashed rates twice in 2020. Although rates are at an all-time low, they will eventually increase and continue to fluctuate over time.

Source: https://www.businessinsider.com/personal-finance/best-money-market-accounts