A money market account gives you the flexibility of a checking account, with the high returns of a high-yield savings account. It makes them a perfect way to earmark money for saving goals if you don't want to tie up your money in CDs.
Money market accounts differ from traditional savings accounts, as they allow check-writing privileges and sometimes come with a debit card that can be used to access money at an ATM.
Therefore, they provide a higher level of liquidity that you likely won't find in other high-yield savings accounts. The APY of a money market account includes compounding interest, which is usually credited monthly.
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Top money market accounts right now
Use this tool to compare savings options fast:
Pros of a money market account:
Here are some of the benefits you'll gain:
- They offer higher interest rates than a traditional savings account
- You gain more access to your cash through debit card and check writing capabilities
- Money market accounts are safe ways to grow your cash, as most are FDIC or NCUA insured.
Cons of a money market account
Keep these things in mind before opening one:
- Many banks require a minimum deposit to open an account, and have minimum balance requirements as well
- The return on money market accounts can be lower historically than investing your money in the stock market
- The interest rate on money market accounts is variable, meaning that if the Federal Reserve cuts interest rates again in the future, your money market rate could drop
- Having easy access to savings can encourage some to spend more than they ought to
Why open a money market account?
A money market account gives you the best of both worlds: You'll earn a higher rate of return with the ability to position investments if the Fed cuts rates in the future.
On top of this, they give you more access to your cash, unlike high-yield savings accounts from online banks, where you can access funds from an ATM card or online transfer.
Here are some of the best Money Market accounts. All are FDIC-insured banks or NCUA credit unions, letting you keep your savings safe:
Account | APY | Min. Opening Deposit |
|---|---|---|
4.35% | $1,000 | |
4.25% | $100 | |
4.15% | $100 | |
4.15% | $1,000 | |
4.00% | $50 | |
3.85% | $1 | |
3.81% | $2,500 | |
3.60% | $5,000 |
There are a few things to keep in mind. One, interest rates on these are variable, so if the Fed decides to cut rates again in the future, it will lower your returns. And there's a chance the Fed cuts rates one or two times to end 2025.
So, you'll need to pay attention to any Fed updates as they transpire. Moreover, some MMAs have minimum balance requirements, and a failure to meet these could result in monthly fees, offsetting some of your interest earnings.
Overall, they're among the most versatile savings solutions available, even with these considerations.
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