Money market accounts are a type of savings account that offer some features of checking accounts and some features of investment accounts. Because of how they work, money market rates tend to be higher than average savings account rates but still come with FDIC insurance, so you know your account is safe.
Money market accounts invest your funds like a mutual fund, but deposits can only to go into very low-risk investments like government bonds. Money market accounts allow check writing, but like a savings account, there is a limit of six withdrawals per month.
A combination of interest rates and account features make money market accounts attractive in some circumstances. Like a traditional savings account, money market accounts are great for emergency funds, down payment savings and other savings goals where you don’t want to risk your principal but want to get better interest than a checking account.
If you think a money market account sounds like the right fit for you, here’s a look at the best money market interest rates as of this writing. We also evaluated the best places to open an account and took into consideration minimum account balances, fees, and more.
We partnered with the following banks to bring you the savings and money market account offers in the table below. Under that, you'll find our editors' picks for the best money market accounts and rates and why we chose them. All of the banks and credit unions listed are insured by the Federal Deposit Insurance Corporation or National Credit Union Administration.
The 8 Best Money Market Rates for January 2020
- Customers Bank Ascent Money Market Savings: Best Money Market Account for $25,000+ Balances - 2.25% APY
- Total Direct Bank: Best Money Market for $5,000+ Balances - 2.10% APY
- CIT Bank Money Market: Best No Minimum Balance to Avoid Fees - 1.80% APY
- Sallie Mae Money Market Account: Best to Save for College - 1.75% APY
- Premier Members Credit Union: Best for Small Balances - up to 3.00% APY
Customers Bank currently guarantees a rate of 2.25% APY on Ascent Money Market Savings accounts opened online, and it guarantees that rate through June 30, 2020. As a savings account, you get up to six withdrawals per month and the account is FDIC insured. There's no maximum deposit, but FDIC insurance tops out at $250,000.
Customers Bank is based in Wyomissing, Pennsylvania and has a history of serving individuals and small- to medium-sized businesses primarily on the East Coast and in Illinois. You won’t get checks or an ATM card for this account (which requires a minimum $25,000 to earn any interest), however, you can deposit or withdraw easily with electronic funds transfers through online banking.
With a minimum deposit of $5,000, you can open a money market account at Total Direct Bank and earn 2.10% APY on your deposits. You can earn this exceptional rate on up to $500,000, but keep in mind that FDIC insurance covers only $250,000.
Interest compounds monthly, and there are no monthly maintenance fees, making this a great place to keep liquid savings if you have the minimum deposit. TotalDirectBank is an online bank operated by City National Bank of Florida.
CIT Bank is not new to top bank and rate lists, and its current 1.80% APY money market offer puts it high on the charts. The CIT money market requires a $100 minimum opening deposit to open, and there is no minimum balance to avoid a monthly fee.
This account offers many of the benefits of a checking account at CIT Bank, including bill pay and People Pay. If you make more than the six allowed withdrawals in a statement period, CIT charges a $10 excessive withdrawal fee.
While the rate isn’t quite the best on the list, the lack of a minimum balance required to avoid a monthly account fee makes this account attractive to anyone with less than $2,500 to save in a money market account.
Want to learn more? Read through our full review of CIT Bank.
Sallie Mae is best known for its student loan business, but Sallie Mae offers a range of savings accounts in addition to student loans. The money market account offers a respectable 1.75% APY.
Sallie Mae often gets a bad rap due to its student loan practices, but its money market account leaves little to complain about. There are some fees for the uncommon activity of an overdraft or stopped payment, but you won’t get hit with any inactivity or low balance fees.
Because Sallie Mae is so tightly connected to higher education, it offers some resources that make saving for college easier and less ambiguous. If you want to save for college in a low-risk account, consider the money market account at Sallie Mae.
Premier Members Credit Union currently offers up to 3.00% APY in its money market account and only requires a $5 deposit to open the account. But unlike some accounts on this list that pay more for higher balances, Premier Members Credit Union pays higher interest rates on lower balances.
Earn 3.00% APY on the first $2,000 deposited, 0.99% on the next $1,000, 0.45% on the next $2,000, 0.30% on the next $35,000. Interest rates go down as you add more to your account.
This means your rate varies based on your deposit size. A $5,000 balance yields a blended 2.19% APY. But at $10,000, your blended APY is just 1.32%.
Customers Bank. "Ascent Money Market." Accessed Jan. 20, 2020.
FDIC. "Deposit Insurance FAQs." Accessed Jan. 1, 2020.
Total Direct Bank. "Money Market Accounts." Accessed Jan. 1, 2020.
CIT Bank. "Money Market Account." Jan. 1, 2020.
Sallie Mae. "Money Market Account." Accessed Jan. 1, 2020.
Premier Members Credit Union. "Money Market." Accessed Jan. 1, 2020.