Money market accounts are similar to savings accounts – except they tend to pay higher interest rates.
Most people new to banking generally open a checking account and savings account when starting out. But banks have several savings vehicles that can earn higher interest than a basic savings and checking account, like money market accounts.
Money market accounts are like a hybrid between a checking and savings accounts that combine some of the best of both features. With money market accounts you earn high interest on your deposits, enjoy easy access to your money, and have the ability to write checks.
Best Money Market Rates for 2023
Here are the best money market rates available online for people across the United States:
PacWest Bank Money Market Account — 5.25% APY
Pacific Western Bank is a leading regional bank with over $44 billion in assets. The bank has over 67 branches in California, Colorado, and North Carolina.
Pacific Western Bank is known for its focus on relationship banking and its commitment to providing excellent customer service.
The savings products offered through the Raisin platform that features market-leading rates for people across the United States.
- Minimum opening balance: $1
- Interest rate: 5.25 percent
- Monthly fee: None
Patriot Bank Money Market Account — 5.22% APY
Patriot Bank is a community bank headquartered in Stamford, CT with an emphasis on building strong client relationships and community involvement.
Branches are located in Connecticut, as well as in Scarsdale, New York.
The savings products offered through the Raisin platform that features market-leading rates for people across the United States.
- Minimum opening balance: $1
- Interest rate: 5.22 percent
- Monthly fee: None
StagePoint Federal Credit Union Money Market — 5.00% APY
StagePoint Federal Credit Union is a not-for-profit organization that prioritizes the communities they serve.
StagePoint Federal Credit Union was founded in 1935 as the Laramie County Teachers Credit Union.
The credit union has since grown to serve over 60,000 members in Wyoming and Colorado.
- Minimum opening balance: $1
- Interest rate: 5.00 percent
- Monthly fee: None
Hanover Bank Money Market Account — 5.26% APY
Hanover Bank offers check writing privileges, unlimited transfers
free online banking, bill pay and a debit card.
- Minimum opening balance: $1
- Interest rate: 5.26 percent
- Monthly fee: None
Quontic Bank Money Market — 5.00% APY
Quontic Bank offers one of the best money market account rates that only requires a $100 opening deposit. Quontic Bank does not charge a monthly fee and interest is compounded daily and credited to your account every month.
Customers receive an ATM card and access more than 90,000 surcharge-free U.S. ATMs. Quontic has an A+ rating with the Better Business Bureau.
- Minimum opening balance: $100
- Interest rate: 5.00 percent
- Monthly fee: None
Who Should Get a Money Market Account?
Anyone looking for a higher interest and a safe place to store cash may benefit from a money market account. Here are a few more benefits:
- Money markets offer easy liquidity if you need your cash unlike CDs where you pay an early withdrawal penalty unless you have a No-penalty CD.
- You want the ability to write checks.
- You want immediate access to funds in case of emergencies.
- You want a good spot to keep your emergency fund.
Is a Money Market Account Safe?
Bank money market accounts are FDIC-insured up to $250,000. The National Credit Union Administration (NCUA) fund insures money market accounts up to $250,000.
What To Watch Out For With Money Market Accounts
Because money market accounts are considered a savings vehicle, they are limited to six outgoing transactions per statement cycle like savings accounts. This is per federal law known as Regulation D. Under Reg D the bank or credit union can charge you a fee, close your account or convert it into a checking account if you go over the limit.
These types of transactions fall under Reg D:
- Online transfers from those accounts to a different account either at the same institution or a different one
- Transfers processed over the phone
- Automatic or preauthorized transfers, such as bill payments or any other recurring transfers
- Overdraft transfers from your savings account to your checking account
- Transfers made by check or debit card
There is a way to get around Reg D six withdrawal limits:
- Withdrawals or transfers made at ATMs
- Transactions made in person at a bank
- Withdrawals made by telephone if the check is mailed to the depositor
The average rate on savings accounts currently sits at a meager 0.42%, according to the FDIC. Moving your money to a high rate savings account or money market account is a good financial move.
- With an annual percentage yield of 0.43% APY, a $10,000 deposit would only earn around $43 after one year.
- With an annual percentage yield of 5.22% APY like at Patriot Bank, $10,000 would earn around earn around $534 after one year.
Start earning more interest for your money today. Earning higher interest makes saving money much more gratifying. If you have a negative banking history consider banks that don’t use ChexSystems to open a savings, money market or checking account.
