Money market accounts (MMAs) are financial tools that offer a unique blend of features from both savings accounts and investment options, providing individuals with a low-risk way to earn interest on their savings while maintaining easy access to their funds.
Let’s delve into the intricacies of money market accounts, understanding their features, benefits, and considerations.
Understanding Money Market Accounts
Money market accounts are interest-bearing deposit accounts offered by banks and credit unions. They are similar to savings accounts but typically offer higher interest rates, making them an attractive option for individuals looking to earn more on their savings while keeping their funds liquid and easily accessible.
Features of Money Market Accounts
Interest Rates: Money market accounts typically offer higher interest rates compared to traditional savings accounts, making them a viable option for individuals seeking to maximize their returns on savings.
Liquidity: Like savings accounts, money market accounts provide easy access to funds through methods such as checks, debit cards, or electronic transfers. However, federal regulations limit the number of withdrawals or transfers from money market accounts to six per month.
Minimum Balance Requirements: Some money market accounts may require a minimum balance to open the account and avoid monthly maintenance fees. The minimum balance requirement varies depending on the financial institution and the specific account terms.
FDIC or NCUA Insurance: Money market accounts offered by banks are typically insured by the Federal Deposit Insurance Corporation (FDIC), while those offered by credit unions are insured by the National Credit Union Administration (NCUA). This insurance protects deposits up to certain limits in case the financial institution fails.
Limited Check-Writing Privileges: Money market accounts often come with check-writing privileges, allowing account holders to write a limited number of checks per month. This feature provides flexibility in accessing funds while maintaining the benefits of interest-bearing savings.
AmansanGh ranked banks based on the following criteria for what money market accounts offer:
- Total assets
- Number of branch locations
- Minimum deposit to open an account
- Money market account rate or APY
- Minimum balance needed in account to earn APY
- Monthly fees
- Minimum balance needed to avoid the fee
- Average mobile app rating
Ally Bank Money Market Account
We like the fact that the Ally Bank Money Market Account essentially functions like a combination checking and savings account while bringing customers the best of both worlds – the flexible spending of the former with the high interest rates in the latter.
In addition to a 4.35% APY on all balance tiers, customers also benefit from instant access to cash via ATMs. Not only do Ally Bank Money Market customers get access to the more than 43,000 Allpoint ATMs for free, but the bank will also reimburse you for up to $10 per statement cycle if you incur fees at other ATMs around the country — a rarity. The Ally Bank Money Market helps your money grow money through interest that is compounded daily, while ensuring that there are no monthly fees, minimum deposits or balance requirements.
BankUnited Online Money Market Account
BankUnited offers a tiered money market account that we like thanks to its highly competitive APY and easily waivable monthly maintenance fee. It also comes with a convenient Visa debit card to make ATM withdrawals and other transactions a breeze.
Money market accounts are a great savings option and BankUnited can show you why you should grow your money there instead of with other competitors. Though you do need a $2,500 minimum opening deposit, it’s a good way to earn a higher rate of return to make your money work for you.
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Beal Bank USA Money Market Account
As far as savings products go, we like Beal Bank’s money market account for a multitude of reasons. Unlike a CD account, you can access your funds while earning a competitively high APY. Earning interest on your money never seemed so easy.
Though you do earn the highest interest if you put at least $25,000 into the account, all you need to open the account and earn a good APY is $1,000 for the deposit. Make sure to maintain at least this amount as your balance to avoid the monthly fee.
Discover® Bank Money Market Account
Unlike several of the other Best Money Market Account winners, Discover Bank’s Money Market Account charges no monthly fee and has no minimum balance requirement to avoid monthly fees. However, you do need to deposit a relatively high minimum amount to open the account, which is important to note.
What makes us recommend Discover’s Money Market Account above other options available is that it offers some of the highest rates in the category. It’s a great choice if you want to earn high interest while still keeping your cash liquid.
EverBank Yield Pledge Money Market Account
Money market accounts sometimes require large deposits to open and high minimum balances to avoid fees, but EverBank has made its money market product extremely accessible by eliminating minimum deposit requirements, monthly fees and minimum balance requirements.
While the APY offered by EverBank is on the lower end compared to other winners in the category, the lack of fees and low barrier to entry distinguishes it from other institutions and makes it a winner in our book. Other perks include mobile check deposits, easy access to your money through checks and debit card, and ATM fee reimbursements.
Sallie Mae Bank Money Market Account
Sallie Mae’s Money Market Account is a great way to save, with a competitive APY and no monthly maintenance fees. Even better, you can write checks out of this account, giving it great versatility.
This is a solid account for people who don’t have a lot to save at first, since there’s no minimum daily balance, which is really helpful to build up your savings. The only real downside is that mobile banking is limited to check deposits and account balances.
Synchrony Bank Money Market Account
Synchrony’s money market account is a wonderful alternative to a checking account, with an APY that’s lower than other on this list, but still much higher than the average account.
This account doesn’t require a minimum deposit, won’t tack on any unexpected fees, and allows you to write checks out of the account. The versatility makes this a great account for people who want to earn interest but also need access to their cash.
Vio Bank Cornerstone Money Market Savings Account
Vio Bank is a neobank with an outstanding money market account. The Cornerstone Money Market Account earned the honors of best money market for its impressively high APY of 5.30% and minimum deposit of just $100.
This account best suits customers without a lot of money to invest upfront, who are looking for a substantial interest rate. We love that you can auto-transfer funds from your linked Vio Bank checking account to automate your savings and reach your goals faster. Many finance experts recommend this tactic to grow your nest egg faster.
Serious savers won’t mind that external transfers can take up to five business days. The Cornerstone Money Market account represents a place to let your money grow, especially if you are saving for a specific goal without any risks or withdrawal penalties.
