The best money market accounts (MMAs) can be a great low-risk investment for your emergency fund or extra cash. They offer better interest rates than personal savings accounts, but are more liquid than certificates of deposit (CDs).
You can find the best money market account rates available using an online tool like the one below. You just have to set the type of account you’re looking for and your approximate balance to get a range of choices to compare.
Unfortunately, even the best money market accounts haven’t been immune to sagging interest rates over the past decade. According to Bankrate, average money market rates have sunk from 0.52% at the beginning of 2012 to 0.21% in early 2019. Not super impressive, but savings accounts are faring even worse, with average rates of 0.06%.
But that’s just the average, which includes brick-and-mortar institutions. In 2019, the best money market account rates are hovering near or above 2.30% APY, regardless of minimum deposit.
There are many competitive options that will keep you near these benchmarks for the best money market rates. Internet banks, traditional banks, and alternative lending institutions are all jockeying for your deposits.
If you don’t feel like searching through so many options, and you want to just skip to the best money market accounts, read on.
The Best Money Market Accounts in 2019
- BBVA Compass ClearChoice Money Market Account
- Sallie Mae Money Market Account
- TIAA Bank Yield Pledge Money Market Account
#1: BBVA Compass ClearChoice Money Market Account
With its combination of high interest rates and customer-pleasing perks, the BBVA Compass ClearChoice Money Market Account is the one to beat. The 2.40% APY is among the best money market rates available, and it applies to any balance. You can open your BBVA account with just $25, making it a great MMA to use when you’re beginning your savings journey. There’s a $15 monthly service fee, but it’s waived if you maintain a minimum balance of $10,000 or transfer at least $25 a month from your BBVA checking account.
Though other withdrawals are limited to six per month (standard for money market accounts), BBVA Compass allows unlimited ATM withdrawals. The account also offers mobile check deposit and check-writing privileges.
- Competitive money market interest rate
- Can open the account with just $25
- Unlimited ATM withdrawals
- Check writing
- 24/7 online access
- Monthly service fee if you don’t transfer at least $25 a month or meet minimum balance requirement.
#2: Sallie Mae Money Market Account
Though they’re better known for student loans, Sallie Mae has an online bank offering high-yield savings options, including a money market account. Sallie Mae comes in as a close second to BBVA with a money market interest rate of 2.30% APY. Better yet, there are no minimum deposits or monthly fees with Sallie Mae, which also offers check writing and mobile check deposit.
The major downside here compared to BBVA is that there are no ATM withdrawals, which can make your cash harder to access.
- Competitive interest rate
- No minimum deposit or maintenance fees
- Mobile check deposit
- Check writing
- 24/7 online access
- No ATM withdrawals
#3: TIAA Bank Yield Pledge Money Market Account
Formerly known as EverBank, TIAA Bank sets itself apart from the crowd by promising to keep its interest rate among the top 5% of banks nationwide. It also offers a new-customer promotional APY of 2.15% for a year. Other perks include no fees on positive balances, check writing, and mobile check deposit.
On the downside, you need $5,000 to open an account. And though the promotional APY is among the highest money market rates around and the yield pledge is unique, TIAA Bank’s ongoing balance-based APY of 1.10% to 2.00% isn’t as impressive as the interest rates offered by some of its online-bank competitors.
- Interest-rate pledge
- No monthly service fees as long as you have a positive balance
- Check writing
- Mobile check deposit
- ATM withdrawals
- 24/7 online access
- Minimum deposit is $5,000
- Non-promotional interest rate lower than some competitors
The Rest of the Best Money Market Accounts
There are a few more MMAs worth noting that didn’t quite crack the top three. Still, they could be a good pick for you depending on your circumstances.
The ableBanking Money Market Savings is offering 1.85% APY — higher than even the promotional rates of many other MMAs that were evaluated. This bank prides itself on low overhead and returns part of that savings in the form of a $25 bonus to any charity you choose when you open an account. There’s a $250 minimum to open an account. Major downsides? No check writing and higher fees than the competition, including $30 for overdrafts.
Synchrony Bank’s Money Market Account offers a competitive 1.20% APY with no minimum balance. Check writing, ATM withdrawals and mobile banking are among the perks.
Axos Bank’s (formerly Bank of Internet USA) High Yield Money Market Account doesn’t require a minimum balance, and there are no monthly service fees. Check writing, debit-card transactions, mobile deposits, and even bill-paying services are included. The 1.05% APY is solid, though not as impressive as other options. Fees can also be hefty here, including a $30 outgoing wire fee.
Discover Bank’s Money Market Account is one of the most convenient MMA options, with free withdrawals at more than 60,000 ATMs, check writing, debit card access, and bill pay. The interest rate is competitive, too, with a 1.95% APY for accounts under $100,000.
If you need a basic primer on MMAs, how they compare to savings accounts and CDs, and whether or not they’re the right choice for you, read on.
What Is a Money Market Account?
A money market account (MMA) is a low-risk savings vehicle that banks and credit unions offer. Banks like MMAs because, unlike personal savings accounts, they can invest that money in other low-risk places including certificates of deposit (CDs) and bonds. The only thing they can do with the cash in your savings account is loan it to others. Also, unlike many personal savings accounts, you may need more cash to open an MMA, particularly at brick-and-mortar banks. Common account minimums are $1,000, $2,500, or even $10,000. Depending on your account, you may be able to write a limited number of checks. Federal regulations will limit you to no more than six electronic, check, or telephone withdrawals from your MMA per month.
In exchange for your larger balance and restricted withdrawals, you’ll receive a better interest rate than you would get with a personal savings account. Overall, an MMA can be a good choice if you want low-risk savings with a slightly higher interest rate as long as you can meet the minimum balance and will need only moderate access to your cash. If you can sock away your cash for a long period, be sure to compare your return from an MMA with what you’d earn from a CD. A CD may have a slightly higher interest rate, but you can’t withdraw cash early without a hefty penalty.
In practice, money market accounts and personal savings accounts can be quite similar when it comes to online, high-yield banks that may offer similar interest rates for each product. You’ll see more of a difference at most local banks, where MMA rates will be substantially higher — this is where the choice between the two becomes more compelling. However, you may run into higher minimum deposits, too. Ultimately, both are excellent places to keep your emergency funds or short-term savings.
Money market accounts vs. money market funds
Be careful not to confuse money market accounts with money market mutual funds (MMFs). You can find an MMA at just about any bank, but a money market fund is a more serious investment product offered by brokerages and the like. MMAs are insured against losses by the Federal Deposit Insurance Corporation (FDIC); MMFs are not. (If you open an MMA at a credit union, your money is insured by the National Credit Union Administration.) Your bank guarantees a certain rate for your money market account, but the interest a money market fund earns will fluctuate along with the market. Bottom line? MMAs make sense for savings you need to keep in a liquid, low-risk account; MMFs do not.
Though seasoned investors might not blink an eye before putting their money into an money market fund, here’s another cautionary tale to illustrate how MMFs are different than MMAs. In 2008, during the subprime mortgage crisis, there was a run on MMF deposits after one such fund “broke the buck,” returning only 97 cents for each dollar invested. The panic stemmed from the fact that MMFs try to keep their share prices at one dollar with no fluctuation. Traditionally, your principal is all but guaranteed, and the only question is how much interest you’ll earn. Later studies have shown that dozens more money market fund could have broken the buck if not for regulators’ quick intervention. Though reputable MMFs are still considered very low risk, choosing an MMA that is backed by the FDIC can ease a lot of your worries.
How to Pick the Best Money Market Accounts
Most savers choose a money market account instead of a savings account because they want a higher interest rate. Looking for banks with the highest money market rates will mostly limit your search to online banks.
However, if you prioritize a firm handshake, face-to-face relationships, and more reliable service, don’t overlook local banks in your search for money market accounts. There are plenty that fared well in J.D. Power’s 2018 Retail Banking Study. Just remember that you’re probably going to get a much lower interest rate than you would online.
The factors I considered in my search for the top money market accounts were:
- No or low minimum deposit: While some MMAs are out of reach for average customers because of their high minimum deposits, many online banks have made MMAs more accessible by easing this common requirement.
- High APY: Online banks tend to offer the highest yields.
- No or low maintenance fees: Some banks charge a monthly account maintenance fee regardless of your balance. Others waive it if you maintain a certain balance, and the best money market accounts don’t charge one at all.
- Other fees are reasonable: Note whether a bank is comparable to its competitors when it comes to fees on overdrafts, wire transfers, and the like.
- Miscellaneous other perks: These include everyday things that make banking easier, such as check-writing privileges, unlimited ATM withdrawals, remote check deposit, online bill pay, and 24/7 account access.
Beginning your search
Unless you strongly believe in keeping your business local, online banks are your best bet for the highest money market rates. Money market accounts are a solid low-risk choice for stashing your money, especially if you want a competitive interest rate. As with savings accounts, make sure to compare minimum deposits, fees, and withdrawal limits.
Get started in your search for the best money market accounts by using our online tool, which lets you compare updated interest rates for MMAs with different opening balances.
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