Find out which banks offer the highest interest rates. If you are looking for relatively high interest rates as well as liquidity and flexibility, a money market account (MMA) may be a great place to store cash.

Unlike traditional savings accounts, MMAs generally offer better returns and can also provide check write privileges and debit card access. This makes these accounts perfect for holding long-term savings you want to grow over time, but can still be accessed on certain purchases or bills.

According to the FDIC, the average interest rate for money market accounts nationwide is only 0.63%. However, the best money market account interest rates typically pay more than 4% of APY, similar to those offered by high-yield savings accounts.

This is the highest money market account interest rate today:

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Money market account rates have fluctuated significantly in recent years, mainly due to changes in the Federal Reserve’s target interest rate (called federal funding rates).

For example, after the 2008 financial crisis, interest rates remained extremely low to stimulate the economy. The Fed cut federal funding rates to near zero, which led to very low MMA rates. During this period, money market account rates are typically around 0.10% to 0.50%, and many accounts offer the low end of the range.

Ultimately, as the economy improves, the Federal Reserve begins to gradually raise interest rates. This leads to higher production of savings products including MMA. However, in 2020, the 19020 pandemic led to a brief but dramatic recession, and the Fed once again lowered its benchmark rate to near zero to hit economic impacts. This leads to a sharp decline in MMA rates.

But starting in 2022, the Fed has begun a series of aggressive interest rate hikes to combat inflation. This has resulted in historically high deposit rates. By the end of 2023, money market account interest rates have been greatly increased, with many accounts offering 4.00% or higher.

Throughout 2024, MMA rates are still rising and accounts with payments above 5% APY can be found.

Today, by historical standards, interest rates are still high, although they began a downward trajectory after lowering the latest tax rates in the late second half of 2024. Today, online banks and credit unions tend to offer the highest interest rates.

When comparing money market accounts, it is important to go beyond interest rates. Other factors such as minimum balance requirements, fees and withdrawal restrictions may affect the total value you get from your account.

For example, money market accounts require a large amount of minimum balance to get the highest advertising rates, which is common – in some cases up to $5,000 or more. Other accounts may charge monthly maintenance fees that may drain your interest income.

However, there are several available MMAs that offer competitive interest rates without any balance requirements, fees or other restrictions. This is why it is important to shop around and compare accounts before making a decision.

Additionally, make sure that the account you choose is insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA), which guarantees up to $250,000 per deposit per institution per depositor. Most money market accounts are federal government, but in rare cases where financial institutions fail, it is important to check them carefully.

Read more: Is money market account safe?

Today, by historical standards, money market accounts are still very high. The best account offers over 4% APY, with the highest interest rate today at 4.51% APY.

The $10,000 amount will make money in the money market account, depending on the annual percentage rate of return (APY) provided by that account, and how long you keep the currency in the account. Suppose you choose to deposit $10,000 into a money market account, which increases APY by 4% per month. After a year, you will receive $407.44 in interest with a total balance of $10,407.44.

Money market accounts are usually safe and flexible savings options, but like any other financial product, they have some adverse effects.

For example, some MMAs require a high minimum balance to open an account or earn an APY for ads. Failure to maintain a minimum balance can result in fines or lower interest rates. In addition, money market interest rates are variable, meaning they can change at any time, as appropriate. If interest rates drop, then your account APY will also make future earnings unpredictable compared to fixed-rate products such as CDs.