Money market accounts currently provide relatively high interest rates along with liquidity and flexibility. Unlike traditional savings accounts, they typically offer better returns and may include check-writing privileges and debit card access. These accounts are suitable for long-term savings that can still be accessed when needed.
The national average interest rate for money market accounts is 0.39%, according to the FDIC. However, the best rates often pay above 4% APY, similar to high-yield savings accounts.
Money market account rates have fluctuated significantly in recent years, largely due to changes in the Federal Reserve's federal funds rate. After the 2008 financial crisis, rates were kept extremely low to stimulate the economy, with the Fed slashing the federal funds rate to near zero. During this time, money market account rates were typically around 0.10% to 0.50%.
As the economy improved, the Fed began raising interest rates gradually, leading to higher yields on savings products including MMAs. In 2020, the COVID-19 pandemic caused a brief recession, and the Fed cut its benchmark rate to near zero again, resulting in a sharp decline in MMA rates.
Starting in 2022, the Fed embarked on a series of aggressive interest rate hikes to combat inflation, leading to historically high deposit rates. By late 2023, money market account rates had risen substantially, with many accounts offering 4.00% or higher.
Throughout 2024, MMA interest rates remained elevated, and it was possible to find accounts that paid well above 5% APY. Today, rates remain high by historical standards, though they have been steadily trending downward following the Fed's cuts in late 2024 and its three rate cuts in 2025. Online banks and credit unions tend to offer the highest rates.
When comparing money market accounts, it is important to look beyond just the interest rate. Other factors such as minimum balance requirements, fees, and withdrawal limits can impact the total value from the account. Some accounts require a large minimum balance, as much as $5,000 or more, to earn the highest advertised rate, while others may charge monthly maintenance fees.
Several MMAs offer competitive rates without any balance requirements, fees, or other restrictions. It is important to shop around and compare accounts before making a decision. Additionally, ensure that the account is insured by the FDIC or NCUA, which guarantees deposits up to $250,000 per institution, per depositor. Most money market accounts are federally insured, but it is important to double-check.
Today, money market account rates are still quite high by historical standards. The best accounts provide over 4% APY, with the highest rate available today at 4.1% APY.
The amount $10,000 will earn in a money market account depends on the APY offered and how long the money is kept in the account. For example, depositing $10,000 in an account earning 4% APY with monthly compounding interest would yield $407.44 in interest after one year, for a total balance of $10,407.44.
Money market accounts are generally safe and flexible savings options, but they come with some downsides. Some MMAs require a high minimum balance to open the account or to earn the advertised APY, and failing to maintain that balance can result in penalties or reduced interest rates. Additionally, money market rates are variable and can change at any time at the bank's discretion, making future earnings unpredictable compared to fixed-rate products like CDs.