Best Money Market Accounts
A money market account is a savings account with checking account features, and it’s FDIC-insured up to $250,000. You can make up to six withdrawals per month, and you may get a debit card and checks. You might need to meet a minimum deposit as well as pay other fees to maintain your account.
Note that the average percentage yield (APY) for a money market account fluctuates as banks adjust their rates to the market. As you can imagine, rates have been dropping lately because of the worldwide crisis. You should look at account features other than APY – like fees – for this very reason. If you’re interested in locking in your savings APY, consider a certificate of deposit (commonly referred to as a CD).
UFB Direct Best Money Market Account
We like the UFB Direct Best Money Market account because it offers one of the strongest APYs available and the option to waive its monthly maintenance fee by maintaining an account balance of $5,000.00 or more.
UFB Direct, which is a product from the San Diego-based Axos Bank, offers 24/7 access through its digital banking tools, so you can see what’s in your account whenever you want. You must be a U.S. citizen or a resident alien in order to apply and have a Social Security number, a valid state ID and a valid U.S. address that isn’t a P.O. Box.
Quontic Bank Money Market Account
Quontic Bank’s money market account offers a 3.50% APY, regardless of your balance. And while there is a $100 minimum opening deposit, you don’t need to meet a certain balance requirement to avoid a monthly fee. What’s more, Quontic Bank also doesn’t charge overdraft fees.
The account also comes with other features, including bill pay, remote deposit, person-to-person transfers, check-writing privileges and even receipt tracking to help improve your money management.
One thing that sets Quontic Bank apart from the competition is how it uses your deposits. Specifically, the bank is dedicated to helping low-income families, immigrants, people of color, small business owners and others who are unable to obtain a home mortgage through traditional channels to realize the dream of homeownership.
Quontic Bank also offers other solid banking products, including checking accounts that offer cash and Bitcoin rewards on your debit card purchases. Like many other online banks, Quontic doesn’t accept cash deposits.
CIT Bank Money Market Account
With only a $100 minimum deposit to open and a 1.55% APY, the CIT Bank money market account is a great choice if you want to start small and work your way up. You’ll earn interest on your entire daily balance, and that interest will be paid out monthly. There is no monthly service fee, but if you send an outgoing wire transfer (domestic only), you will pay $10 if your account has less than $25,000 in it.
CIT doesn’t offer the highest interest rate out there, but at least you only need $100 to start your account. After that, there’s no minimum balance required. The bank provides 24-7 online access to your account, which you can easily link to your Zelle or PayPal to make payments.
Key Features to Look for in a Money Market Account
There are several key factors to consider when choosing a money market account:
- Interest rates: Shop around to find the best money market account rates. Online banks tend to offer the most competitive rates, but lack physical locations for in-person banking needs.
- Account requirements: Look to see if a bank or credit union carries any requirements to open or maintain a money market account, such as a minimum opening or ongoing balance requirement. Determine if you have funds available to meet the requirements to open an account or avoid monthly fees.
- Fees: Some banks charge monthly service fees for managing your money market account. Other potential fees include excessive transaction, overdraft and returned check fees. Paying fees can cut into savings earned with a money market account. Look for a bank that charges little to no fees.
- Features: Determine what features are important to you in a money market account and look for financial institutions that meet those needs. Look for features like a checkbook, a debit card and fee-free ATM access, a mobile app and other tools to help you manage your money.
Money Market Accounts Vs. Savings Accounts
Money market accounts and savings accounts can help consumers maximize savings efforts. Each account type comes with advantages and disadvantages.
Money Market Accounts
- Typically have higher interest rates than standard savings accounts
- Often come with a checkbook and debit card, providing more access to funds when needed
- Usually limited to six withdrawals per month
- Not all money market accounts come with check-writing privileges or debit cards
- Often carry higher minimum deposit requirements
- May carry monthly service fees
- Competitive annual percent yields (APYs) on high-yield savings accounts
- Lower minimum deposits
- May offer lower interest rates than money market accounts
- May carry monthly service fees
- Most savings accounts don’t come with a checkbook or debit card
Both types of accounts allow you to save toward specific financial goals. Savings accounts are ideal for short-term savings goals. Typically, you need to move savings account funds to an everyday spending account, like a checking account, to use them. Savings accounts allow you to separate the money you want to save from your everyday spending.
Money market accounts provide more flexibility, making them an excellent vehicle for an emergency fund or other savings goals requiring accessible funds at any given time.
The best option may depend on which account offers the best rates and other perks. It may also depend on your specific needs. If you prefer access to additional features, like check-writing privileges and ATM access, a money market account may make more sense. If you don’t require immediate access to your funds, a high-yield savings account may offer more competitive APYs depending on the bank or credit union. Determine what’s most important to you and choose the option that best addresses your needs.
Money Market Account FAQ
A money market account (MMA) is an interest-bearing deposit account available at some banks, credit unions or other financial institutions. Money market accounts offer similar features to savings accounts, like earning interest or transaction limits. They may also include features similar to checking accounts, such as a debit or ATM card or check-writing privileges.
Like other deposit accounts, deposits kept in a money market account are protected by the government up to $250,000 per depositor per account per institution. The Federal Deposit Insurance Corporation (FDIC) insures money market deposits held at banks. The National Credit Union Administration (NCUA) protects money market account deposits kept in credit unions.
Money market accounts differ from money market mutual funds, which are a type of mutual fund available through brokerage firms and other investment service providers.
Money market accounts offer features found with savings and checking accounts. Generally, they feature competitive interest rates similar to high-yield savings accounts. Money market accounts feature variable interest rates, meaning rates can change at any time based on the current economic climate and other factors.
Some money market accounts feature tiered interest rates based on your account balance. Accountholders may need to maintain a specific minimum balance to earn interest or avoid monthly account service fees. Typically, money market accounts are subject to six withdrawals per statement period like a savings account, although some banks may follow different guidelines.
Depending on the bank or credit union, money market accounts may come with a checkbook and check-writing privileges or a debit or ATM card. Money market accounts aren’t necessarily a substitute or alternative to everyday checking accounts due to their usual transaction limits. Money market accounts are a good option for individuals with short-term savings goals, like funding a vacation or building an emergency fund.
The government protects deposits to money market accounts at federally insured banks or credit unions. That means if your bank fails, deposits are protected up to legal limits, similar to savings accounts and other bank account types.
The type of insurance coverage depends on where you choose to bank. The Federal Deposit Insurance Corp (FDIC) provides insurance coverage for federally insured banks. The National Credit Union Administration (NCUA) regulates credit unions and insures deposit accounts at federally insured credit unions. Both insure deposit accounts up to $250,000 per depositor, per insured bank or credit union, per account category.
Some but not all money market accounts allow you to write checks. Check writing privileges vary depending on the financial institution. Some banks or credit unions also provide free debit cards and access to an ATM network.
Some financial institutions provide online bill pay services, allowing you to pay bills without access to a checkbook.
Money market accounts with check-writing privileges and debit cards provide more ways to access funds than a standard savings account. However, many banks limit monthly withdrawals with money market accounts, often making them less flexible than a checking or savings account.