As interest rates begin to fall following recent Fed cuts, it's more important than ever to make sure you're earning a competitive rate on your savings. One option you may want to consider is a money market account (MMA).
These accounts are similar to savings accounts – they offer interest on your balance, but may also include debit card and/or check writing capabilities.
Wondering where to find the best money market account rates today? Here's what you need to know.
Historically, interest rates on money market accounts have been quite high. The national average interest rate for money market accounts is just 0.66%, according to the FDIC, but the top money market account rates often pay more than 4% APY or even more—similar to the rates offered on high yield savings accounts.
Here's a look at some of the best MMA rates available today:
See our picks for the 10 best money market accounts available today >>
In addition, the table below shows some of the best savings account and money market rates available today from our trusted partners.
Deposit account rates—including money market rates—are linked to the federal funds rate. This is an interest rate range set by the Federal Reserve and is what banks charge each other for overnight loans. When the Fed increases the federal funds rate, deposit account rates typically increase. And conversely, when the Fed lowers its rate, deposit rates fall.
Since July 2023, the Fed has maintained a target range of 5.25%-5.50%. However, as inflation cooled and the economy improved, the Fed cut the federal funds rate by 50 basis points in September, and another 25 basis points in November and December. As a result, money market rates have started to fall.
Further rate cuts are expected in 2025, meaning now may be the last chance for savers to take advantage of higher rates today.
Read more: Can you lose money in a money market account?
Given that money market account rates are still high, these accounts are an attractive option for savers. However, deciding whether this is the right time to put money into a money market account also depends on your financial goals and the broader economic conditions. Here are some key factors to consider:
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Liquidity needs: Money market accounts offer easy access to your money as they often come with check writing capabilities or debit card access (although there may be a cap on monthly withdrawals). If you need to keep your money accessible while still earning a decent yield, a money market account could be ideal.
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Savings goals: If you have short-term savings goals or want to build an emergency fund, a money market account can provide a safer place for your cash, with returns that are better than most traditional savings accounts.
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Risk tolerance: For conservative savers who prefer to avoid the ups and downs of the stock market, money market accounts are appealing because they are backed by FDIC insurance and cannot lose the principal. However, if you're saving for a long-term goal like retirement, riskier investments are needed to generate higher returns that will get you to your savings target.
Given that interest rates are still high, now might be a good time to consider a money market account, especially if you're seeking a balance of safety, liquidity, and better returns than traditional savings accounts. Comparing rates from different organizations will help you find the best options available.