The Best Money Market Accounts for December 2022
The Best Money Market Accounts for December 2022
If you care about your finances and have worked hard to ensure your money is working for you, there’s no reason why your money market account should be earning a less-than-competitive rate.
You can do better.
The good news is that instead of scouring the internet to find the best money market account rate, you could take a look at our curated list of the best money market accounts.
We’ve compiled a list of the select group of banks that consistently offer the highest money market account rates in the industry.
Here’s a couple of our featured standouts – but read on for the full list, learn how we determined that these are some of the best money market accounts, and discover how you can improve your yield even in a falling rate environment.
Where to Find the Best Money Market Accounts
Finding the bank with the best money market account to meet your goals is as easy as using our money market explore tool. Give it a try and find the best money market account for you.
What Is a Money Market Account?
A money market account is similar to a savings account, except it may also offer a debit card or check-writing capability to facilitate withdrawals.
The ability to use money in the account by writing checks and using a debit card makes a money market account particularly effective for your emergency fund or as a place to hold funds in between investments.
Like an online savings account, online money market accounts typically earn higher yields safely. What’s more, most are offered by banks and credit unions that are insured up to $250,000 by the FDIC or NCUA.
Savings and money market accounts fall under Federal Reserve Board Regulation D, which limits withdrawals to six per month.
These accounts are not designed for frequent transactions like paying bills, but they are a great place to put your money and earn more interest than you would in a typical checking account.
Money market account rates change frequently too, so making sure your deposits are optimized to earn the best yield is the best way to accumulate savings for large purchases.
For high-growth potential over the long term, you may want to search for a CD or other investment.
Best Bank to Open a Money Market Account
While rates are changing all the time, there are some standout money market accounts that offer higher-than-average interest rates to account holders.
We’ve compiled some of the best banks offering high-yield money market accounts to help you decide.
Axos Money Market
Despite rates falling dramatically over the past few years, Axos Bank’s high-yield money market account has maintained some of the highest rates as of late. Here’s a quick look at some of the best features:
About the bank
Based in sunny San Diego, California, Axos Bank is an FDIC-insured bank. Established in 2000, it had about $14.4 billion in total deposits as of mid-2021.
Key features
The average rate offered by Axos Bank’s money market account in the latest America’s Best Rates survey was .791% higher than the average money market rate in that survey.
On a $10,000 account balance, this difference would be worth an extra $79.10 per year in interest.
Pros
- No minimum balance requirement
- No monthly maintenance fees
- Write checks on available balance
- $1,000 minimum balance required to open an account
- $8.00 fee if balance falls below $1,000
Best Money Market Accounts with Consistently High Rates: Editorial Reviews
The latest America’s Best Rates survey showed again that most consumers could still earn more money on their money market accounts.
Even as rates continued to fall, there were still a few banks offering average rates of over .90% in the most recent quarter.
That’s many times the national rate offered at some of the largest national banks.
Switching to a better money market account (or savings account, for that matter) is one of the easiest ways to earn more every year without much effort.
Learn more about each of the banks that also make the cut here:
Sallie Mae Money Market
A money market account with Sallie Mae Bank could be helpful and efficient, particularly if you have a student loan through Sallie Mae. These pros and cons can help you decide if this is the right money market for you.
About the bank
Based in Salt Lake City, Utah, Sallie Mae Bank is an FDIC-insured bank that was established in 2005. The bank also offers savings accounts, CDs, and private student loans.
Key features
The average rate offered by Sallie Mae Bank’s money market account in the latest America’s Best Rates survey was .711% higher than the average money market rate in that survey. On a $10,000 account balance, this difference would be worth an extra $71.10 per year in interest.
Pros
- No minimum balance requirement
- No monthly maintenance fees
- Write checks on available balance
- Interest rate and tiered structure may change at any time
- Excess transaction fee may apply
First Internet Money Market
First Internet Bank is another great option for money market accounts, but you’ll need to pay attention to the tiered structure to earn the highest interest rate.
About the bank
First Internet Bank of Indiana is an FDIC-insured bank that was established in 1999. As of mid-2021, it had over $3 billion in total deposits.
Key features
For customers who can maintain a minimum balance of $4,000 and thus avoid the $5-per-month maintenance fee, the average rate offered by First Internet Bank in the latest America’s Best Rates survey was .711% higher than the average money market rate in that survey. On a $10,000 account balance, this difference would be worth an extra $71.10 per year in interest.
Pros
- Competitive APY
- ATM fee surcharges are refunded up to $10 per month
- A mobile app is available
- Monthly maintenance fee of $5 if the balance falls below $4,000
- The minimum to open an account is $100
CIT Bank Money Market
CIT Bank is consistently among the best of the online money market account offerings. Check out the pros and cons of this money market account and see how it stacks up.
About the bank
CIT Bank is an FDIC-insured bank that was established in 2009. It is headquartered in Pasadena, California. As of mid-2021, it had about $42 billion in total deposits.
Key features
CIT Bank’s money market account in the latest America’s Best Rates survey was, on average, .701% higher than the average money market rate in that survey. On a $10,000 account balance, this difference would be worth an extra $70.10 per year in interest.
Pros
- Works with Zelle and PayPal
- No monthly service fees
- Deposit checks remotely and make transfers using CIT Bank’s mobile app
- Minimum to open an account is $100
- Excess transaction fee may apply
CIT Bank Money Market Account Review
ableBanking Money Market
The ableBanking division of Northeast Bank also manages to keep interest rates consistently high over time, but you should be aware of the tiered structure for rates here. Learn more about the pros and cons of ableBanking:
About the bank
ableBanking, a division of Northeast Bank, is an FDIC-insured bank that was established in 1872. As of mid-2021, it had about $1.2 billion in total deposits.
Key features
On average, the money market account offered by ableBanking in the latest America’s Best Rates survey was .701% higher than the average money market rate in that survey. On a $10,000 account balance, this difference would be worth an extra $70.10 per year in interest.
Pros
- Minimum balance to earn APY is $0.01
- Competitive APY
- Mobile app is available
- Minimum to open an account is $250
- Excess transaction fee may apply
Discover Bank Money Market
Well known for its no-fees-ever policy, Discover Bank also offers consistently high-interest rates on its money market account. A glance at the pros and cons of a Discover Bank money market account can help you decide if it’s right for you.
About the bank
Based in Greenwood, Delaware, Discover Bank is an FDIC-insured bank that was established in 1911. As of mid-2021, it had about $63 billion in total deposits.
Key features
Discover offers five different ways to deposit funds into your account:
- Online transfer from a qualified Discover Bank Account
- Online transfer from an outside bank account
- Direct deposit
- Deposit a check via mobile check deposit.
- Mail a check
Pros
- Competitive APY
- Deposit checks remotely with mobile app
- Large ATM network
- Minimum to open an account is $2,500
- Tiered interest rate structure
How We Compare Money Market Accounts
The following are the characteristics MoneyRates looks for when comparing banks to find the best money market accounts:
Security of your funds
The America’s Best Rates survey covers money market accounts eligible for Federal Deposit Insurance Corporation (FDIC) insurance.
Compound interest rates
Annual percentage yield (APY) rather than simple interest is used for comparison purposes to take into account the effect of compounding.
Consistent interest rates
Since money market offers are subject to change at any time, MoneyRates looked for consistency by measuring the average rate each bank offered throughout the calendar quarter being studied.
Minimum-balance requirements
Since different rates may apply to different account balances, MoneyRates compared rates across a uniform balance tier for all banks.
Online vs. branch-based banking
To track rate trends across different types of money market accounts, MoneyRates computes average rates for both online and traditional, branch-based accounts.
How We Picked the Best Money Market Accounts
To objectively measure the characteristics described above, here is how MoneyRates evaluates money market accounts and rate trends:
MoneyRates continually monitors money market account offers from hundreds of banks and tracks banking trends by measuring rates in a representative cross-section of the banking industry through its America’s Best Rates survey.
This cross-section includes 50 of the largest deposit institutions in the United States, plus 25 medium-sized and 25 small banks. This represents nearly three-quarters of all deposits in U.S. banks.
Since banks may have different minimum-balance requirements and apply different rates to different balance tiers, MoneyRates compares the rate each bank would apply to a $10,000 money market account.
MoneyRates looks for consistency when it puts together its list of the highest money market account rates.
Money market account rates are subject to change at any time, so rather than listing rates based on a single snapshot in time, MoneyRates measures the average rate each bank offered during the entire calendar quarter.
Between measuring a large cross-section of the banking industry and putting the emphasis on banks that offer consistently high rates, the MoneyRates bank rankings can point you toward several choices of leading money market accounts.
What to Consider Before Opening a Money Market Account
Here are eight essential tips to guide you as you evaluate the best money market account for you:
1. Check money market rates often
Money market interest rates vary a great deal, so shopping for rates can be very rewarding.
Even though rates are subject to change at any time, the America’s Best Rates research by MoneyRates shows that most banks offering the best money market rates tend to be among the leaders year after year.
While comparing money market rates can be very rewarding, here are three things you should know when shopping for rates:
Teaser vs. ongoing bank interest rates
Some banks lure customers with short-lived “teaser” rates. These look great but soon expire. What you really want to know when shopping for rates is what the ongoing rate currently is.
Jumbo money market rates
These are special rates some banks offer for accounts of $100,0 00 and up. If you have a balance that big, you should base your decision based on the jumbo money market rates available.
Different rate tiers
While not all banks offer special rates for jumbo accounts, many do have different rate tiers. This means the bank will offer different rates depending on the size of your balance.
Compare rates based on what your balance is likely to be, and be alert for maximum balance limits for certain rates as well as minimum-balance requirements.
2. Watch out for fees
While comparing rates should be your first consideration when choosing a money market account, be aware that some banks also charge monthly maintenance fees on these accounts.
These fees often apply if you fail to meet a certain minimum-balance threshold.
Fees can eat away some or all of the interest you earn, so try to avoid money market accounts with monthly fees unless the account’s interest rate advantage is enough to overcome the effect of the fee.
3. Note the minimums for money market deposits
The minimum to open an account may differ from the ongoing minimum-balance requirement.
This means that just because you have enough money to open an account doesn’t mean you have enough to meet the minimum balance requirement, which could affect the fees you pay and/or the interest rates you earn.
Also, pay close attention to minimum-balance requirements if you expect you may be withdrawing from the account over time.
Try to choose an account that will allow you to meet their minimum-balance requirements even after you make your withdrawals.
4. Compare traditional vs. online banking
There is often a huge rate difference between traditional, branch-based accounts and online money market accounts. Compare rates based on the type of banking you plan to do.
Note that online money market account rates are generally much higher than traditional money market account rates; so if possible, opt for an online account.
5. Ensure sufficient access to funds
As mandated by the Federal Reserve’s Regulation D, money market accounts (and all other accounts classified as “savings deposits”) may only permit six or fewer transfers to third parties per month.
That includes checks and debit-card transactions, which means these accounts aren’t ideal for funding regular purchases.
In addition, be sure to research any restrictions on how quickly you can access your money market account.
6. Pick your perks for accounts
Some money market accounts include check-writing and debit-card privileges – something ordinary savings accounts do not.
But it’s important to verify that any account you’re considering has these perks if you wish to have them because they aren’t universal.
Additionally, some banks also offer reimbursements of ATM fees, as well as online tools to assist you in managing your account.
If you’re an online-banking aficionado, it couldn’t hurt to take a tour of a prospective bank’s website – or perhaps even read some reviews of it – before opening an account there.
7. Consider if you need a retirement money market account
If you want to have low-risk investments for your retirement, determine if a retirement money market account is right for you.
For example, setting up a money market account within an Individual Retirement Arrangement (IRA) could give you tax advantages.
A money market account is not the type of growth vehicle people typically use for long-term retirement savings, but it can be useful to provide liquidity once you reach retirement age or to balance out riskier investments.
8. FDIC insurance limits for money market accounts
Are money market accounts FDIC insured? They can and should be. Make sure that your deposits will be backed by insurance from the FDIC.
FDIC insurance coverage protects funds up to $250,000 per depositor, per institution in the event of a bank failure, and banks that carry it are required to display the FDIC emblem prominently in their branches or on their website.
Like most types of insurance, it’s something you hope to never use but that you’ll be very glad to have if things turn for the worse.
If you are looking to deposit more than $250,000 in a non-joint account (FDIC insurance can protect joint accounts to a higher level since there are multiple account owners), it’s wise to spread your money among multiple FDIC-insured institutions to ensure maximum coverage of your funds.
Frequently Asked Questions
Are there some situations where an online bank is just better than a traditional bank?
Choosing between online banking and traditional banking is often a matter of preference, but there are some situations that may be a better fit for one or the other.
For example, in a recent survey of online savings accounts, MoneyRates.com has found that online banks tend to offer higher interest rates on savings accounts than traditional banks.
This is no surprise because it represents the fact that an online institution can operate with less overhead than a bank which must maintain an extensive branch network.
Also, savings accounts are a great fit for online banking, because the nature of them is that you shouldn’t need much in the way of ongoing contact with bank representatives.
A checking account, on the other hand, is designed for more frequent interactions. This doesn’t necessarily rule out an online bank, but you’d want to make sure there is a wide enough ATM network in your area to meet your needs.
One concern that often comes up in connection with online banking is security. You should inquire about what a bank has done to secure its web access, and what its safety record has been.
You should also recognize your role in the security of your banking data.
Make sure the firewall and other security measures on your computer are adequate, avoid accessing bank information on public networks, and use creative passwords that would be hard for anyone else to guess.
Finally, keep in mind that security breaches are not unique to online banks.
Hackers have penetrated the computer records of traditional banks as well, so in this day and age, you should have a conversation with your bank about security, whether or not you bank online.
According to the latest America’s Best Rates survey by MoneyRates.com, the average interest rate on money market accounts is 0.159%, though several banks offer at least five times that rate.
You can take money out of a money market account at any time, though how quickly you can get your money may depend on specific restrictions and procedures at your bank.
By law banks have to make your money available within seven days; but as a practical matter, most banks do it much faster than that.
You can make payments from a money market account; though the number of transactions per month is limited, so these accounts are not ideal for regular bill payments.
You can withdraw money in person from a money market account as often as you like (this also includes ATM transactions). However, other types of transfers out of the account, including automatic payments, checks, debit card transactions, and other transfers to third parties are limited to six per month.
Your money market account may have a check-writing feature, but note the limitation on check-writing in the answer to the question above.
Typically yes, though how often interest is compounded can vary. That’s why it is important to compare the annual percentage yield (APY) rather than the simple interest rate, because the APY takes into account the impact of compounding.
Both money market accounts and checking accounts at participating banks are covered by FDIC insurance for up to $250,000 per depositor (or $500,000 for joint accounts) per institution. Money market accounts offered by credit unions rather than banks are covered by a similar form of federal insurance offered by the National Credit Union Administration (NCUA).
Your interest will be taxable during the year in which it is earned, unless your money market account is part of a qualified retirement plan like an IRA.
Money market accounts operate in essentially the same way as a savings account, though they may offer different interest rates and/or have different procedures for accessing your money.
While you can access a money market account at any time, a certificate of deposit usually locks up your money for a specified period of time and imposes a penalty if you access your money before that time has expired.