Today’s Top Money Market Account Rates For August 2, 2024 — Rates Move Upward – Forbes Advisor – Technologist

Current Money Market Rates

The current average money market rate is 0.61%, while the highest rate is up to 5.13%.

Here are today’s money market account rates:

• Average APY: 0.61%
• Highest Rate: 5.13%

Source: Curinos. Data accurate as of August 1, 2024. Rates are based on a $10,000 minimum deposit amount.

What Are Money Market Rates?

Money market rates are the interest rates you earn on your balance in a money market account. Rates for money market accounts are variable, meaning they are subject to change at any time and are calculated as a percentage of your balance. Often, money market accounts have tiered rates with larger balances earning the best rates.

The interest rate for a money market account represents how much money you earn on your balance, and the annual percentage yield (APY) represents how much you earn on your balance plus compound interest over the course of a year. Compound interest is the interest you earn on interest as it’s added back to your account.

How Does a Money Market Account Work?

A money market account, or MMA, is an interest-bearing deposit account you can open at a bank or credit union. These are insured up to $250,000 per depositor by the FDIC at banks, or the NCUA at credit unions. The insurance protects your balance if your bank fails.

As with other savings accounts, your money in an MMA will grow as it earns interest, and you can add or withdraw funds at any time. You may also be able to write checks or use a debit card. However, depending on the bank, you could be limited to six transactions per statement period.

Money market accounts may offer higher interest rates than typical savings accounts. In exchange, they often require higher minimum deposits and balances.

How To Open a Money Market Account

Before opening a money market account, look into at least a few options with different banks. Compare minimum balance requirements, monthly fees, withdrawal limits and APYs to choose the best fit. Don’t forget to check out the conditions to earn the highest interest rates too.

You can typically apply for a money market account online or in person. You will need to provide personal information such as your name, employment status and income, address and Social Security number, as well as show a government-issued ID. Then, once you’re approved, you can make your initial deposit.

Money Market Account vs. Savings Account

Money market accounts share similarities with both savings and checking accounts. Like savings accounts, a money market account allows you to deposit money at your convenience and earn regular interest on your balance. Both accounts are safe and liquid, with easy access to your cash and insurance on your deposit. Either account can have monthly fees, withdrawal restrictions and balance requirements to earn interest and avoid fees. However, money market accounts typically have higher fees and balance requirements.

Like checking accounts, money market accounts often offer debit cards and checks, making them more convenient than the average savings account. However, money market accounts may limit your transactions, making MMAs less than ideal for regular use.

Is a Money Market Account Worth It?

A money market account is worth it if you want to save now but have easy access to your cash later. The accounts are safe options for putting away money because they’re FDIC- or NCUA-insured and won’t lose value. As long as you can meet deposit and balance requirements to avoid fees and earn interest, you’ll be in good shape with a money market account.

If you can’t fulfill the requirements for earning the highest rates, or if a money market account imposes fees that exceed your earnings, an MMA might not be worth it. Explore other savings accounts for smaller balances, or consider interest-bearing checking accounts if you frequently need to access your funds.