As of today, money market account (MMA) rates are offering some of the most competitive returns in recent times, despite recent rate cuts by the Federal Reserve. In 2024, the Fed reduced its target rate three times, and has followed up with another rate cut in 2025. As a result, deposit rates, including those for money market accounts, have started to decline. With this in mind, it’s more important than ever to compare available rates and maximise your earnings on any balances you hold.
Money Market Account Rates Overview
The national average money market account rate is currently at 0.59%, according to the FDIC. However, several leading accounts are offering rates of 4% APY and higher, with some reaching as much as 4.26% APY. These attractive rates may not last long, so now could be an ideal time to open a money market account and lock in these high returns before rates fall further.
Here is a snapshot of some of the best MMA rates available today:
| Bank or Provider | APY | Minimum Deposit | Monthly Fees |
|---|---|---|---|
| Provider A | 4.26% | $1,000 | None |
| Provider B | 4.10% | $2,500 | None |
| Provider C | 4.00% | $1,000 | None |
| Provider D | 4.05% | $5,000 | None |
| Provider E | 4.05% | $1,000 | $10 |
How Much Interest Can You Earn with a Money Market Account?
The interest you earn with a money market account is determined by the annual percentage yield (APY). This figure reflects your total earnings over the course of a year, taking into account the base interest rate and how often the interest compounds. Most money market accounts compound interest daily, which can help boost your overall return.
Let’s break down the potential earnings:
- If you deposit $1,000 into an account with an average rate of 0.59% APY, with daily compounding, your balance at the end of one year would be $1,005.92—your initial deposit plus $5.92 in interest.
- If you were to deposit the same amount, but into a high-yield money market account offering 4% APY, your balance at the end of one year would grow to $1,040.81, earning $40.81 in interest.
The more you deposit, the more you stand to earn. For example:
- A $10,000 deposit at a 4% APY would yield $408.08 in interest after one year, bringing your total balance to $10,408.08.
In summary, by taking advantage of higher APY rates and larger deposits, you can significantly increase the interest earned on your money market account, making it an effective way to grow savings over time.