The money market accounts are accounts that provide the highest interest rates that savings accounts have, but with the convenience of an account with a checking. The top money market accounts come with check-writing capability as well as a debit card or both and offer very low or no minimum amount to balance. We've compiled our top picks for the top money market accounts here.
The Ascent's most popular rate and money-market accounts.
What is a market account?
The money market is a savings account that has a number of features of savings and checking accounts. The majority of banks have this type of account. Rates for the money market is similar to rates found in money market accounts. Some of the top ones offer 0.50 percent APY or greater.
In contrast to most savings accounts, money market accounts are typically paired with debit and checks for direct withdrawal of funds. These accounts are FDIC protected, meaning that your funds are protected at a maximum of $250,000 per person per bank in the event of eventual bank failure.
How do you choose the right money market account?
If you're thinking of opening an account for the money market You'll need to be sure you choose the right one. Here's what to look for:
- FDIC insurance safeguards your funds in the event that your bank is unable to pay. A majority of money market accounts carry this.
- High APY: Seek an annual percentage yield (APY) that is similar to the highest rate, however, don't stress about selecting the most yielding savings account for the money market. Rates are subject to change and the best choices can change with time.
- Debit card: Certain accounts come with debit cards in case you want to withdraw money in one go or make use of your money market account to purchase things.
- Check-writing capabilities: Certain money market accounts include check-writing features instead of or as the place of the debit card. Find a bank account with this feature ability if you plan to directly write checks out of the bank account.
- Branch locations For those who prefer to make your bank transactions in person, you can open an account with a money market company at a bank with branches close to you. The ability to withdraw funds from your account in person doesn't add to the limits on your monthly withdrawals This is a great way to access more money without incurring additional charges.
- ATM locations: If your money-market account comes with debit cards, make sure you know the nearest fee-free ATMs and if your bank is charged fees for using an out-of-network ATM. The top banks can refund you some out-of-network ATM costs every month.
- Balance requirements: Determine whether the bank you use has account deposit requirements or ongoing balance requirements and if they do, then ensure that you're in a position to meet these requirements.
Who is eligible to open a cash market account?
A money market account is a great idea if:
- Are you looking to get interested earned on savings
- Are you looking for easy withdraws of your account (withdrawing from an account for savings can be a little bit of a problem)
A high-yielding market account lets you earn money from your savings. It also avoids the main issue with a savings account. With a savings account, you are not able to withdraw money directly. Instead, you need to transfer the funds to a checking or savings account first. Money market accounts however permit you to take out cash in one go. They also typically provide a debit card or checks (and certain accounts provide both).
They're not the best alternative for checking accounts, in the event that you aren't a frequent user of funds. However, a money market account can replace your savings account if you want it to. Money market accounts, as well as savings accounts, have to be subjected to Regulation D, which limits the number of withdrawals you can make each month. You are charged additional fees for going over the limits. To combat the spread of the disease that was ravaging the country, the government lifted this restriction in 2020, however, banks have their own restrictions on the number of transactions per month you are allowed to make.
Terms of the market to be aware of
Here are some of the terms to be used when discussing the rates and money market accounts:
- Annual percentage yield (APY) It is an annually calculated representation of the rate at which the account earns interest. The term APY means "annual percentage yield." Many people use the term to refer to interest rates, however, they aren't identical. APY includes an actual rate of interest, as well as the frequency at which interest is compounded. An APY that is higher means greater money for the customer. The APYs for money market accounts can be variable at any moment.
- Minimum balance: Certain account types require an initial balance in order to open the account or for the purpose of avoiding monthly maintenance charges. The minimum balance requirements for these accounts can be higher than what is required in savings accounts.
- Limitations on transactions Accounts with a money market may be subject to limitations regarding the number of convenient withdrawals you are able to take without paying additional charges. Easy withdrawals include electronic transfers, the majority of check withdrawals, as well as bill payments online. However, they don't include items like withdrawals at a branch or cash withdrawn from an ATM.
Options for money market account alternatives
If you're not sure an account in the money market is the right choice for you there are other options to consider.
Savings account
A savings account is a different kind of account for a deposit that offers an APY similar to a money market account, however, it comes with limitations on the access to funds. There are only six withdrawals from your savings account per month.
if you want to avoid paying fees. Moreover, the majority of savings accounts don't have check-writing capability and debit cards. However, savings accounts typically have less of a minimum balance requirement as compared to money-market accounts and some might not have any minimum balance requirements in any way.
CD
A CD is a different type that a deposit account (CD is a contraction of "certificate of deposit"). They can offer APYs similar to or more than money market account rates. For these rates, you must pay a fee for withdrawing your funds prior to the duration of the CD duration. CD terms are anywhere from a month up or two to 10 years in length, but the majority fall within the six-month-to- five-year timeframe.
They are a good option for saving money that you do not plan to utilize anytime soon However, it is important to take into consideration what interest rates are currently. CD rates are usually locked for the entire term duration and are ideal when rates are falling however they can be a problem when they are rising.