Maximize Your Savings with High-Yield Money Market Accounts
When it comes to storing your cash, you want a safe and liquid option that also earns a decent interest rate. Money market accounts (MMAs) fit the bill, offering a higher return than traditional savings accounts while still providing easy access to your funds.
What Sets MMAs Apart
Unlike traditional savings accounts, MMAs typically offer better returns, often with check-writing privileges and debit card access. This makes them ideal for holding long-term savings that you want to grow over time, but can still access when needed.
Current MMA Rates
The national average interest rate for MMAs is a mere 0.66%, according to the FDIC. However, the best MMAs can pay around 4.5% to 5% APY, similar to high-yield savings accounts. Here are some of the top MMA rates available today:
- Quontic Bank Money Market Account: 4.75% APY
- Brilliant Bank Surge Money Market Account: up to 4.70% APY
- TotalBank Online Money Market Deposit Account: 4.67% APY (on balances of $2,500 and up)
- First Foundation Bank Online Money Market Account: 4.50% APY
- VIO Cornerstone Money Market Savings Account: 4.46% APY
- Zynlo Money Market Account: 4.40% APY
- Prime Alliance Bank Personal Money Market Account: 4.15% APY
A Brief History of MMA Rates
MMA rates have fluctuated significantly in recent years, largely due to changes in the Federal Reserve’s target interest rate. In the wake of the 2008 financial crisis, interest rates were kept extremely low to stimulate the economy. However, as the economy improved, the Fed began raising interest rates, leading to higher yields on savings products, including MMAs.
The Impact of the Pandemic and Inflation
The COVID-19 pandemic led to a brief but sharp recession, and the Fed cut its benchmark rate to near zero to combat the economic fallout. This resulted in a sharp decline in MMA rates. However, starting in 2022, the Fed embarked on a series of aggressive interest rate hikes to combat inflation, leading to historically high deposit rates across the board.
What to Look for in an MMA
When comparing MMAs, it’s essential to look beyond just the interest rate. Other factors, such as minimum balance requirements, fees, and withdrawal limits, can impact the total value you get from the account. Ensure that the account you choose is insured by the FDIC or NCUA, which guarantees deposits up to $250,000 per institution, per depositor.
Shop Around and Compare
There are several MMAs available that offer competitive rates without any balance requirements, fees, or other restrictions. Shop around and compare accounts before making a decision to ensure you’re getting the best deal for your savings.
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