Compare Money Market Rates for 2024: Earn Over 5% APY

Money market accounts function similarly to savings accounts. When you deposit money into a money market account, you start earning interest. Typically, this interest is calculated daily based on your account’s balance and paid out monthly. Money market accounts often offer competitive interest rates. Many come with features like check-writing and debit card access. This allows you to manage your finances conveniently while still earning interest on your deposits.

Once you have compared rates to find the best APY (annual percentage yield) and other features such as minimum deposit requirements, you can open your money market account either online or at a branch of the bank you have chosen.

In either case, you will need to present several documents when you open your account. These may include:

• Driver’s license or state ID
• Birth certificate
• Social Security number
• Phone number
• Proof of address (in the case that your ID states a previous address)

In the process of opening your new account, you will need to fund it. If you’re opening the account in person at a branch, you can do this by cash or check. If, however, you’re opening your account online, you will need to transfer money electronically from another bank account. Be sure to have the account information for your bank you plan to transfer money from in this case.

The most competitive money market accounts typically offer APYs ranging from 4.65% to 5.25%. These rates are substantially higher than the national average, which currently stands at 0.66%.

Yes, money market accounts are generally considered very safe. If your bank is insured by the FDIC or your credit union is insured by the NCUA, your account is covered for up to $250,000.

Money market accounts are similar to savings accounts but usually offer higher interest rates. They might require you to maintain a higher minimum balance. They also often come with features similar to checking accounts, such as the ability to write checks or use a debit card. Unlike checking accounts, however, they may limit the number of transactions you can make or the amount of money you can withdraw.

Money market accounts are essentially a type of savings account that invest in low-risk securities and as such rarely depreciate in value. They are also insured by the FDIC for up to $250,000, so even if the bank collapses your money is not at risk.

This said, it is possible that a poorly chosen money market account could make a dent in your savings if you’re not careful. If the account you have chosen offers a low annual APY and charges fees and penalties on things like falling below a minimum balance, you could end up paying more out than you earn in interest. Be sure to chose an account with good rate of interest (accounts offering 5% APY or more are available) and doesn’t charge fees. Pay attention to your account’s terms and if it has a minimum balance, make sure you don’t fall below it!

Yes, money market accounts are FDIC insured up to the legal limit of $250,000 per depositor. This is because they are considered a type of deposit account and not an investment, distinguishing them from similarly-named money market funds which are considered an investment and as such are not insured by the FDIC.

This will depend on the total value of your assets and what your intentions are with them, although it is not recommended that you hold more than the maximum amount of $250,000 that can be insured by the FDIC.

There is no data available on the ‘typical’ balance held by a person in their money market account and we would suggest that those looking to save should not worry so much about the typical balance.

A healthy amount looks like however much you have left over once you have set aside a separate emergency fund (amounting to three to six months’ spending) and paid off your house, your car, etc. It’s great to have a pile of money set aside to work for you but don’t feel that you have to set aside more than you can afford, just bear in mind that many banks require a minimum deposit which could be as much as $10,000.