Money market accounts offer the benefits of both checking and savings accounts. You earn a competitive interest rate on your balance, and you can often spend directly from a money market account with checks, a debit card, or electronic transfers.
We’ve highlighted some of the best money market accounts for your money. The list starts with banks and credit unions offering the highest rates. But other account features might be more important to you than the rate, so we've included accounts that offer the best all-around experience, best mobile banking, and best way to make a difference.
To fit the classic definition of a money market account, the accounts on this list must allow you to write checks from your balance. What’s more, these accounts offer federally backed deposit insurance, so your funds are safe, up to maximum limits.
Best Money Market Rates of 2021
|Bank or Credit Union||Why We Picked It||APY||Minimum Deposit Required to Open|
|Affinity Plus Federal Credit Union||Best APY||1.50% on the first $25,000, then 0.70%||$0|
|Premier Members Credit Union||Runner-Up for Best APY, Best for Small Balances, and Best for Physical Branches||2.00% on the first $2,000, then 0.50% or lower||$5|
|National Cooperative Bank||Honorable Mention for APY||Up to 0.91%||$0|
|Ally Bank||Best for Mobile Banking||0.50%||
|Discover Bank||Best All-Around Experience||0.35% on up to $100,000, then 0.40%||$2,500|
|Self-Help Credit Union||Best for Making a Difference||0.25%||$500|
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 additional details on our editors' picks for the best money market accounts and rates and why we chose them.
Affinity Plus Federal Credit Union: Best APY
Affinity Plus Federal Credit Union pays a high rate and offers payment flexibility in the Superior Money Market Account. There’s no minimum deposit requirement and no monthly fee, but to earn the highest rate, you need to meet two requirements: You must enroll in online document delivery and set up a monthly direct deposit of at least $500. The highest rate, 1.50%, is available on the first $25,000 in your account. But you still earn a decent rate of 0.70% on balances above $25,000. When you want to make payments, you can spend from your account with checks, a debit card, or online bill payment.
Affinity Plus FCU members have access to more than 60,000 fee-free ATMs nationwide. If you’re not eligible for membership already, you can qualify by making a $25 donation to the Affinity Plus Foundation. You'll also need to keep at least $10 in a Membership Savings account.
Highest money market rate that we know of as of Nov. 5, 2020
Several options for making payments
APY drops on amounts over $25,000
Premier Members Credit Union: Runner-Up for Best APY, Best for Small Balances, and Best for Physical Branches
Premier Members Credit Union takes a unique approach to money market accounts. Instead of requiring a significant deposit to qualify for the highest interest rate, the credit union offers an excellent rate on small balances. The account pays 2.00% APY on your first $2,000, and the dividend rate drops after that. You earn:
- 0.50% on the next $3,000
- 0.35% on the following $5,000
- 0.25% on the portion of your balance between $10,000 and $50,000
- 0.15% on balances above $100,000
Premier Members provides a handy calculator to help you understand exactly how much you can expect.
You can write checks from your account, and you can get started with as little as $5 in a money market account. Anyone nationwide is eligible to join Premier Members Credit Union by also joining Impact on Education (IoE), which supports schools in Boulder, Colorado. Membership is easy, as you can join IoE at the same time as you apply for credit union membership and Premier will make a $5 donation to the charity on your behalf. You’ll also need to open a share savings account with at least $5, but there are no monthly fees on the account.
Premier Members is part of the CO-OP shared branching network. As a result, you can access your account at other participating credit unions nationwide. That means you can use 5,600 branch offices or over 30,000 ATMs across the U.S., typically at no charge. With shared branching, you have more locations available than you’d get with megabanks like Chase and Wells Fargo.
Great rates on small balances
Low initial deposit requirement
Blended (effective) rate falls as balance increases
National Cooperative Bank: Honorable Mention for Rate
National Cooperative Bank pays an excellent rate in the Impact Money Market account, which allows you to spend with checks, a debit card, and online transfers. The account requires just $100 to open, but there’s a $25 monthly charge when your balance is below $5,000. You’re allowed to spend from the account up to four times per month; beyond that, you pay a $1 excessive transaction fee for additional transfers.
Flexible spending options
Steep fee for balances below $5,000
If you’re choosing a bank primarily because of high rates, prepare yourself for some frustration. Rates change constantly, and sooner or later, today’s leader will be replaced. Ask yourself how willing you are to chase rates as this happens, and how much the rate matters, based on your account balance.
Discover Bank: Best All-Around Experience
Discover Bank’s money market account offers a wide range of payment options, a vast ATM network, and charges no fees. The rate might not be the highest, but money market accounts are for flexibility—not the highest savings rates (for that, you’ll want to consider a high-yield savings account).
To open a money market account with Discover, you’ll need at least $2,500, but there are no monthly fees, even if your balance falls below that level. The highest rate is available with at least $100,000, and you earn 0.05 percentage point less on balances below that level. When you’re ready to spend, you can do so with a debit card, checks, online bill pay, or cash withdrawals. Discover Bank earned a top-three ranking in the J.D. Power 2020 U.S. Direct Banking Satisfaction Study, and you can speak with customer service 24/7, if you ever need help.
Several ways to spend from your account
24/7 customer support
Other competitive checking and savings accounts available
Relatively high minimum initial deposit required
Higher APY available elsewhere
Ally Bank: Best for Mobile Banking
With no minimum initial deposit requirement, it’s easy to open an account at Ally Bank. There are no monthly fees to worry about, and you can open a variety of complementary accounts, like savings and interest-bearing checking accounts.
You can spend from your Ally money market account with checks or a debit card, and the bank reimburses up to $10 of ATM fees each month. Ally Bank ranked in the top five of the J.D. Power 2020 U.S. Direct Banking Satisfaction Study, and live customer support is available 24/7. The online bank does charge some fees, though it makes clear what they are, so customers aren’t in the dark.
No minimum balance required to open account
Online display shows hold times for phone support
Higher APY available elsewhere
No physical branches for in-person banking
Self-Help Credit Union: Best for Making a Difference
Self-Help Credit Union focuses on improving the financial lives of underserved communities, especially people of color and people with relatively low incomes. It has been at it since 1980, and the credit union has spearheaded legislation and organizations to protect consumers from predatory lending. When you deposit funds into a money market account here, you’re helping individuals, businesses, and nonprofits that need help the most.
With a $500 minimum deposit required to open, you earn interest on your balance. You can spend from your account with checks or make cash withdrawals with a debit card.
Membership at Self-Help Credit Union is available to anyone nationwide by paying a one-time $5 membership fee to the Center for Community Self-Help. You’ll also need to deposit at least $5 into a share savings account.
Participates in nationwide CO-OP shared branching network
Focus on improving peoples’ lives
Higher rates available at other institutions
Monthly $5 fee on balances below $500
What Is a Money Market Account?
A money market account is a deposit account that pays interest and typically includes options for making payments. The amount you earn in a money market account might be similar to rates on savings accounts. But money market accounts often have an extra feature that savings accounts lack: The ability to make payments.
For example, a money market account might allow you to spend from your account balance with a debit card, online bill pay, electronic transfers, or paper checks. As a result, you can make payments or withdraw money directly from your account without needing to transfer funds to a checking account. In addition to saving you this step, money market accounts also earn interest on the money up until it’s directly withdrawn.
Not all banks and credit unions offer money market accounts, but many do. It’s critical to review the rates, features, and fees to determine if a particular institution’s money market account makes sense. The payment methods differ from bank to bank, and some accounts limit you to no more than three payments and/or six withdrawals per month—so you need to select an account that fits your needs.
Money market accounts at banks and credit unions are generally insured. If your account is covered by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Share Insurance Fund (NCUSIF), your assets are protected up to federal limits. Insurance is typically $250,000 per depositor, per institution at both banks and credit unions. While money market accounts may be covered, it’s important to understand the difference between money markets and money market funds—these are securities, and they do not have the same level of protection.
Money market funds are securities that invest in a variety of short-term instruments and can potentially lose value.
Should You Open a Money Market Account?
There are two good reasons for exploring money market accounts. They may allow you to:
- Maximize your earnings
- Make payments
Money market account interest rates might be high—potentially higher than some savings accounts, and most likely higher than interest-bearing checking accounts. When the former is the case, it makes sense to use a money market account as a substitute for savings. Deposit idle cash into that account, and let it grow safely.
A money market account allows you to earn a competitive APY while making funds accessible for payments. That might be helpful when you have one or two large payments each month, and you want to maximize your interest earnings.
For example, if you have a substantial mortgage payment, it could make sense to pay that expense from a money market account. You’ll keep earning interest until the bank processes your payment, unlike if you just used a checking account. And it’s easier than moving your money from a high-yield savings account to a checking account a few days before you pay your mortgage. The extra earnings might not be significant, but when every penny counts, this strategy could make sense.
Money Market Accounts vs. Savings Accounts
|Money Market Accounts||Savings Accounts|
|May only allow six or fewer payments per month||Typically allow a maximum of six outgoing transfers per month|
|May offer check writing||Do not offer check writing|
|May include a debit card for purchases and ATM withdrawals||Debit or ATM card is for cash withdrawals only|
|May feature online bill payment||Must transfer funds to checking for online bill pay|
|May have a minimum deposit requirement||Often no minimum (or a low minimum) to open|
|May pay a lower APY in exchange for flexibility||Usually pay the highest APY of any liquid account|
Savings accounts tend to have fairly straightforward withdrawal rules. Most banks allow up to six outgoing transfers from a savings account each month, though it may vary by bank or credit union. When you withdraw cash from an ATM or teller, that typically doesn’t count toward the limit, nor does writing a check made payable to you.
Money market accounts may have unique limits. Like savings accounts, they typically max out at six withdrawals per month. But some banks set more restrictive rules on how many payments you can make from your money market account each month. For example, you might only be allowed to withdraw money with your debit card at a merchant or write checks three times per month.
Savings accounts don’t offer check writing. However, money market accounts usually allow you to write several checks per month. By comparison, to spend money from your savings account, you usually need to withdraw cash or transfer funds to a checking account.
Debit and ATM Cards
Some money market accounts provide a debit card, which you can use for in-person or online purchases. Some savings accounts provide ATM cards for cash withdrawals, but those cards don’t work for purchases. If you have a checking and savings account at the same bank, your debit card should allow you to withdraw cash from either your checking or savings account.
Some savings accounts don’t offer any way to get cash at an ATM—you have to transfer money out of the account when you want to use it.
Is the Interest You Earn on a Money Market Account Taxable?
Interest earnings from a money market account are typically included in your taxable income. That applies to taxable accounts, such as individual, joint, and many trust accounts. However, if your money market account is registered as a retirement account, such as an individual retirement account (IRA), the annual income should not be taxable in the year received. You might have to pay taxes and penalties when you withdraw money, so check with your accountant or tax professional before you open an account or take distributions.
How to Choose the Best Money Market Account for You
Decide which features are most important, and select a bank that provides what you need.
- Payment options: The tools available for payments might determine which bank you use. Investigate if you can spend your money with a debit card, checks, online bill pay, or other methods.
- Fees: It’s critical to minimize fees in your money market account. Especially if you have a small balance, monthly maintenance fees can eat away at your account or wipe out your earnings.
- Minimum deposits: Some banks require you to deposit a large amount before opening a money market account. Similarly, you might need to keep your balance above certain levels to avoid monthly fees—or to earn the highest rates available.
- APY: When interest earnings are the most important feature for you, look at banks and credit unions that pay the highest money market account interest rates. Take note of temporary promotions, maximum limits, and other restrictions that could limit your earnings.
- Other features: When several banks appear to meet your needs, review account management tools and other features. Look for things like direct deposit, text and email alerts, ATM networks, mobile apps, and anything else that can make your life easier.
Compare several banks using the factors above, and consider how exactly you’ll use your account. After that analysis, a clear winner should emerge.
How We Chose the Best Money Market Rates
We started with a universe of more than 100 banks and credit unions that offer money market accounts. From there, we highlighted offerings with the features that are most important. While high APYs are nice, that might not be your top priority in a money market account. Things like customer service, flexible payment options, other bank resources, and fees can affect how satisfied you are with your next bank account.
Affinity Plus Federal Credit Union. "Superior Money Market." Accessed Nov. 27, 2020.
Affinity Plus Federal Credit Union. "Become a Member." Accessed Nov. 27, 2020.
Premier Members Credit Union. "Money Market." Accessed Nov. 27, 2020.
Co-Op Financial Services. "Co-Op Shared Branch." Accessed Nov. 27, 2020.
National Cooperative Bank. "Impact Money Market." Accessed Nov. 27, 2020.
Discover. "Online Banking FAQ: Money Market Accounts." Accessed Nov. 27, 2020.
J.D. Power. "Direct Banks Earn Higher Customer Satisfaction than Traditional Retail Banks, but Face Call Center Challenges." Accessed Nov. 27, 2020.
Self-Help Credit Union. "Money Market Account." Accessed Nov. 27, 2020.
Self-Help Credit Union. "Eligibility | Member Eligibility." Accessed Nov. 27, 2020.