Money market accounts (MMAs) are a great option for people looking to earn higher interest rates on their cash than is typically offered by a savings account at a traditional bank. Unlike a savings account, money market accounts often come with check-writing and debit card privileges to make your cash more accessible. However, MMAs are still limited by federal law to six withdrawals per month, just like a savings account. We compared the rates, fees, and services on the money market accounts at every major bank in America to find the very best options, even if you don’t have a large balance to deposit on day one.
The best money market accounts of 2019
|Bank||Max APY||Min Deposit||Best Feature|
|Ally||0.90%||$0||Great customer service|
|Capital One||1.90%||$0||Physical branches|
|TIAA Bank||2.00%||$5,000||High APY|
|BMO Harris||1.70%||$5,000||Debit card privileges|
|Synchrony||1.20%||$0||Online savings tools|
What is a money market account?
A money market account is essentially an alternative savings account, but it usually offers higher interest rates (including compounding interest) than your standard savings account would. Like a savings account, money market accounts are limited by federal law to six withdrawals per month. However, you don’t have to leave your cash untouched for a predetermined period of time like you would with a certificate of deposit (CD). A money market account is a great “in-between” account for people who need to save money, want to earn interest, but will likely need to access that money. That’s why some MMAs come with perks like check-writing and debit cards, to make your savings more accessible.
Money market accounts vs. CDs
While MMAs and CDs are both savings options that accrue interest, there are some key differences. Certificates of deposit (CDs) usually offer higher interest rates, but lock your savings up for the length of the term (anywhere between three months and 10 years), during which time you can’t withdraw a cent without facing a stiff penalty fee. Money market accounts, on the other hand, are much more flexible. You can make up to six withdrawals per month, and some banks even provide checks and debit cards. But in exchange for that flexibility, MMAs usually won’t have interest rates as high as CDs, especially compared to long-term CDs. Still, both options will often have higher rates than a traditional savings account at a brick-and-mortar bank.
Money market accounts vs. high-yield savings accounts
High-yield savings accounts are very similar to MMAs in that they both offer a fairly high interest rate. More often than not, brick-and-mortar banks like Chase and Bank of America offer money market accounts as a higher-interest option to traditional savings accounts, while some online banks like Capital One skip money market accounts altogether and offer high-yield savings accounts instead. If maximizing your earning potential is your biggest priority, it makes sense to go with whichever account offers the highest interest rate, but some money market accounts do offer unique perks like check-writing and debit card privileges, making them more accessible than a high-yield savings account.
Money market accounts vs. checking accounts
Money market accounts should never be a substitute for a checking account. While some banks will allow you to conduct online bill payments, write checks, or use a debit card with an MMA, they’re still restricted to six withdrawals or transactions per month by federal law, making it impossible to use a money market account for everyday spending like you would a checking account. Only use an MMA for cash you won’t need to access very often.
Top money market account providers
There is no minimum balance requirement to open or maintain a money market account with Ally, and customers receive a debit card and up to $10 in reimbursed ATM fees. It offers a 0.90% baseline APR, or 1.00% if you maintain a daily balance greater than $25,000. With Ally, you can expect zero fees on standard or expedited ACH transfers, postage-paid deposit envelopes, and official cashier’s checks. There are some services that do come with fees, including overdraft fees, outgoing domestic wire fees, and ATM fees greater than $10 a month. You can see a full list of fees here. Ally is an online bank, so it doesn’t operate any physical branches.
Another online banking option is Discover, which boasts a very high APY available for consumers and requires no money to open the account. For accounts with less than $100,000, customers can expect a 1.75% APY; for accounts with more than $100,000, the APY is 1.70%. Like most Discover accounts, the MMA has no maintenance fees, no minimum balance fees, no ATM fees when withdrawn at one of the 60,000 Discover ATMs nationwide, no item return fees, and no insufficient funds fees or excessive withdrawal fees. The Discover app makes it easy and convenient to find its ATMs wherever you go. If you have other accounts with Discover, it’s easy to link those accounts and instantaneously transfer between them.
Capital One has 755 branches and cafés throughout the US, as well as 2,000 ATMs. It offers an 0.85% APY on MMAs less than $10,000 and 1.90% for accounts with daily balances over $10,000. Consumers can expect no monthly maintenance fees with a Capital One MMA, but for a full list of fees, be sure to check its website. Capital One’s MMA comes with a debit card and its banking app makes setting up transfers and linking accounts easy. Plus, Capital One accounts come with tools that help you save and keep track of your spending habits.
An Online bank with a network of over 880,000 ATMs nationwide, TIAA Bank Offers an APY of 2.00% for first-time money market account clients with a daily balance of at $5,000 – one of the highest APYs in the industry. There are no monthly maintenance fees with TIAA Bank, and its MMA is IRA-eligible. However, TIAA charges a host of fees, including a large overdraft fee ($30), stop payment fees, as well as fees for cashier’s checks and wire transfers. For daily balances ranging from $10,000 to $100,000, the APY is 1.90%. Other rates vary all the way down to 1.0% for daily balances less than $9,999. Customers do have the option of using the money market account to pay bills online (subject to the maximum sex withdrawls per month).
BMO Harris has 600 brick-and-mortar locations nationwide, along with 1,300 ATMs. The BMO Harris money market account is available for customers who have at least $5,000 and like TIAA Bank, your APY will vary depending on your daily balance. For accounts with $5,000-$9,999, consumers can expect an APY of 0.25%. For accounts with $250,000 or more, customers can glean 1.70% APY. There are no monthly maintenance fees associated with any tier of the MMA, although consumers should check the full list of associated and <ahref=”https://www.bmoharris.com/pdf/disclosures/mm-reg-dd.pdf”>additional fees here. Customers will receive a debit card upon opening this MMA and checks can be ordered.
Synchrony is an online bank that specializes in high-yield savings accounts. Synchrony offers the same APY to all money market account holders, regardless of daily balances. Their online savings calculator allows you to quickly see how much your money will earn for you in four different banks (including Synchrony) and how they all compare to the national average. MMA holders will receive an ATM card, but ATM withdrawal fees won’t be refunded. Synchrony does offer electronic and wire transfers, as well as checks for your MMA, but fees may apply.
The impact of 0.10% on $1,000
How much do those decimals on the end of your APY actually matter? If you made an initial investment of $1,000 on an MMA at a rate of 1.90% APY, at the end of the first month you would make $1.57 on your investment. That same account, without any contributions after the initial investment, would earn you $9.46 in 180 days and $19.10 in 12 months. Compare that to the same initial $1,000 deposit (without any further contributions) with a 2.00% APY. This would earn you $1.65 in the first 30 days, $9.95 after 6 months, and $10.20 in 12 months. If just a 0.10% increase can make a tangible difference, imagine what a 1.00% increase will do! Of course, money market rates aren’t the only thing that matters — fees and services should also be considered when deciding where you bank.