How much will $10,000 make in a money market account in one year?
According to FDIC data, the average money market account earns 0.70% APY. However, the best money market accounts currently offer APYs of around 5.00% or higher. If you deposit $10,000 into one of these high-yield accounts, you would earn $513 or more in interest over a year, assuming daily compounding.
To understand how your potential earnings on a $10,000 investment can be affected by the APY of your money market account, take a look at the table below.
| APY |
Interest earned annually on $10,000 |
Total value |
| 0.70% |
$70.24 |
$10,070.24 |
| 4.00% |
$408.08 |
$10,408.08 |
| 4.25% |
$434.13 |
$10,434.13 |
| 4.50% |
$460.25 |
$10,460.25 |
| 4.75% |
$486.43 |
$10,486.43 |
| 5.00% |
$512.67 |
$10,512.67 |
| 5.25% |
$538.99 |
$10,538.99 |
This table assumes that interest is compounded daily and credited monthly. The calculations shown are just a simple example. Always seek advice from a qualified professional before making important financial decisions or long-term agreements.
How much can I earn from our top banks?
As you can see from the previous table, choosing a money market account with a high APY provides you with greater earnings potential.
Our top picks for the best banks offer high APYs with relatively low risk for your $10,000 investment. The table below shows how much interest you might earn in a year with these banks.
| Bank |
APY |
Interest earned after one year |
Total value after one year |
| Ponce Bank |
5.26% |
$540.04 |
$10,540.04 |
| American First |
5.24% |
$537.93 |
$10,537.93 |
| Lemmata |
5.03% |
$515.83 |
$10,515.83 |
| Quontic |
5.00% |
$512.67 |
$10,512.67 |
| mph.bank |
4.70% |
$481.19 |
$10,481.19 |
APYs are correct as of July 2024. This table assumes that interest is compounded daily and credited monthly. The calculations shown are just a simple example. Always seek advice from a qualified professional before making important financial decisions or long-term agreements.
How much could I earn by 65 with $10,000 in a money market account?
The earlier you start your money market account, the more money you’ll make on your $10,000 investment. When you begin saving in your early 20s, you’ll have more time for interest to compound and your savings to grow over time. You can accumulate more interest when your initial investment grows for decades versus only a few years.
If you put $10,000 in a money market account with an APY of 5.00% at age 20, you’ll earn X in interest by the time you reach 65.
The table below shows how much your investment will grow by the time you turn 65 depending on the age at which you start savings.
| Starting age |
Years to 65 |
Interest earned |
Total value |
| 20 |
45 |
$84,862.75 |
$94,862.75 |
| 25 |
40 |
$63,880.45 |
$73,880.45 |
| 30 |
35 |
$47,539.13 |
$57,539.13 |
| 35 |
30 |
$34,812.29 |
$44,812.29 |
| 40 |
25 |
$24,900.44 |
$34,900.44 |
| 45 |
20 |
$17,180.96 |
$27,180.96 |
| 50 |
15 |
$11,168.91 |
$21,168.91 |
| 55 |
10 |
$6,486.65 |
$16,486.65 |
| 60 |
5 |
$2,840.03 |
$12,840.03 |
The calculations shown are just a simple example. Always seek advice from a qualified professional before making important financial decisions or long-term agreements.
The calculations in the table above assume the following:
- The APY is fixed at 5.00% and will not change.
- Interest is compounded daily and credited monthly.
- You make no additional deposits or withdrawals.
- There are no account fees.
Learn more about how much you could earn over time with our savings calculator.
How does a money market account work?
Credit unions and banks offer money market accounts that work like other deposit accounts. They pay higher interest rates than regular savings accounts and often allow you to write checks or use a debit card to access your funds. Banks typically compound interest in money market accounts daily and pay it monthly.
[Learn more about how money market accounts compare to savings accounts.](https://www.latimes.com/compare-deals/banking/money-market/money-market-account-vs-savings-account)
Should I invest $10,000 in a money market account?
Consider the pros and cons when deciding whether or not to invest $10,000 in a money market account.
Pros explained
-
Liquidity: This refers to how easily you can access funds held in an account. MMAs are highly liquid and allow you to spend money from your account much like you can from a checking account. You’ll be able to access your funds when you need them.
-
High interest rate: Unlike traditional savings accounts, money market accounts offer higher interest rates. You can earn more money by depositing your funds in an MMA instead of your regular savings account.
-
Relatively low risk: Money market accounts are relatively low-risk savings vehicles. Since banks hold them, your money is FDIC insured up to $250,000.
Cons explained
-
Limited transactions: While you can access your money in an MMA with a debit card or check, most banks limit the number of transactions you can complete each month. This can be a problem if you intend to make lots of transactions.
-
Limited growth potential: Money market accounts also have a limited growth potential compared to other types of investments. While the interest rates are typically higher than traditional savings accounts, other investment choices offer higher rates and a greater growth potential.
-
Low returns: The returns offered by money market accounts are generally low. The interest that accumulates is at a lower rate than the returns you might enjoy from investing in stocks.
Alternatives to earning with money market accounts
Some relatively low-risk alternatives to consider when you are thinking about what to do with $10,000 include CDs, high-yield savings accounts, checking accounts and money market mutual funds. Let’s take a closer look at each of these alternatives.
CDs
Certificates of deposit (CDs) are accounts offered by credit unions and banks. If you open a CD with $10,000, you’ll agree not to make withdrawals for a specific duration. In exchange, the bank will pay a guaranteed interest rate during the CD’s term.
The interest you’ll earn on a $10,000 CD depends on the account’s term and the financial institution. Terms can range from a few months to five years, and the best rates currently range from 4% to 6%.
Unlike money market accounts, CDs are illiquid. You can’t access your money before the CD’s term ends without paying penalties.
High-yield savings account
High-yield savings accounts are available online and from some brick-and-mortar banks. They offer higher interest rates than traditional savings accounts. These accounts offer APYs similar to those offered by money market accounts, and both are FDIC-insured.
Unlike money market accounts, high-yield savings accounts do not come with the ability to write checks or access funds with debit cards. Instead, you will have to make withdrawals or transfers to access your money.
[Learn how much you can earn with $10,000 in a high yield savings account.](https://www.latimes.com/compare-deals/banking/savings/how-much-will-10000-make-in-a-high-yield-savings-account)
Checking account
Like money market accounts, checking accounts give you ready access to your money and the ability to write checks and use debit cards for purchases. They are also FDIC-insured. However, checking accounts do not pay interest.
Money market mutual fund
Money market mutual funds may share a similar name to MMAs, but they are an entirely different investment product. These are mutual funds sold by brokers instead of banks through which you can invest in short-term securities. They carry a greater risk than MMAs and are not FDIC-insured.
However, money market mutual funds typically offer higher interest rates than money market accounts or other savings accounts. However, they typically do not allow you to write checks or withdraw funds with debit cards.
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