The Federal Reserve reduced its target rate three times in 2025. Deposit rates, including those for money market accounts, have been falling steadily since then.
According to the FDIC, the national average money market account rate is currently 0.58%. However, some top-tier accounts are still providing rates of 4% annual percentage yield or more.
Financial observers note that these higher rates may not be available for long. They suggest opening a money market account now to secure current offers.
Interest earnings depend on the account's annual percentage yield. This figure accounts for the base interest rate and how frequently interest compounds, which is typically daily for these accounts.
For example, a $1,000 deposit at the average 0.58% rate with daily compounding would yield about $5.82 in interest over one year, resulting in a total balance of $1,005.82.
In contrast, a high-yield account offering 4% APY would generate approximately $40.81 in interest on the same $1,000 deposit, bringing the balance to $1,040.81 after a year.
Larger deposits lead to greater earnings. A $10,000 deposit in a 4% APY account would earn around $408.08 in interest, totaling $10,408.08 after one year.