Find out how much you can earn with today’s money market account rates. Deposit interest rates (including money market account rates) have fallen over the past two years. That’s why it’s more important than ever to compare MMA rates and make sure you’re getting as much income as possible on your balance.
The national average money market account rate stands at 0.56%, according to the FDIC. This may not seem like much, but consider that four years ago, it was only 0.07%. So by historical standards, money market rates are still very high.
Even so, some top accounts currently offer more than 4% APY. Since these rates may not last long, consider opening a money market account now to take advantage of today’s high rates.
Here’s a look at some of today’s top MMA quotes:
The amount of interest you can earn from a money market account depends on the annual percentage rate (APY). This is the amount of your total income after one year after taking into account the base interest rate and how many times the interest is compounded (money market account interest is usually compounded daily).
Say you put $10,000 in MMA with an average interest rate of 0.56% compounded daily. At the end of one year, your balance will increase to $10,056.16 – your original $10,000 deposit, plus $56.16 in interest.
Now let’s say you choose a high-yield market account that offers 4% APY instead. In this case, your balance would grow to $10,408.08 over the same period, which includes $408.08 in interest.
Compared to a traditional savings account, a money market account may come with more restrictions. For example, money market accounts often require a higher minimum balance to get the best interest rate and/or avoid fees. Some MMAs may also limit the number of withdrawals you can make per month (usually six).
Generally, there are no banks that offer 7% interest rate on money market accounts or any other type of deposit account. That said, you may find local banks and credit unions running limited-time promotional rates on some accounts, which can be as high as 7%. However, promotional prices at this level are often applied on limited balances.
Read more: Are 7% interest savings accounts available anymore?
