Average Money Market Rates: Maximizing Your Savings Potential

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• The average money market account earns 0.66% Annual Percentage Yield (APY), according to the FDIC. 
• The actual interest rate on a money market account may depend on the account balance and bank.
• Money market interest rates can change over time.

A money market account functions like a savings account — it earns a small amount of interest, can help money grow, and has monthly limits on withdrawals.

To learn more about the impact of money market account rates on savings, we'll dive into how money market rates are determined and where to find the best money market accounts.

Introduction to money market rates

Definition and importance of money market accounts

The money market account rate tells you how much you'll earn by keeping money in it. When looking at money market rates, you might see two different numbers — the interest rate and the annual percentage yield (APY).

Both of these numbers are expressed as percentages. The difference between these two numbers is that the APY tells you how frequently the interest is compounded, while the interest rate doesn't. If you're trying to figure out how much interest you'll earn in a year, you should refer to the APY, not the interest rate. 

Keep in mind that money market accounts are not the same as money market funds. Money market accounts are interest-earning bank accounts that are FDIC-insured for up to $250,000 per depositor per account ownership category. Money market funds are a type of investment option that isn't FDIC-insured. There is a risk you could lose money in a money market fund.

How money market rates work

Your money market account's rate will vary based on several factors, including the balance, which bank you use, and the current interest rate market. The average money market account rate is 0.66% APY based on an average of $10,000 to $100,000 balance tiers, according to the FDIC.

Money market accounts have variable rates, just like traditional savings accounts. The rate can change over time, and you'll get a notice from your bank if this happens. 

Factors influencing money market rates

Money market rates tend to change with the overall economy and interest rates set by the Federal Reserve. The Fed may adjust the federal funds rate to ensure that long-term interest rates, maximum employment, and price stability are maintained. 

You'll see money market account rates drop at financial institutions when the Fed cuts rates and rise when the Fed raises rates. 

The Federal Reserve cut rates in December 2024. This followed rate cuts in November 2024 and September 2024, for a total cut of 100 basis points, or 1.00% of interest. The Federal Reserve is expected to continue cutting rates in 2025 since the inflation rate is close to the Fed's goal of 2%. That being said, money market rates are still competitive, as the federal funds rate is still relatively high.

Comparing money market rates

Money market interest rates vs. high-yield savings interest rates

Money market accounts will typically have higher interest rates than the average savings account's interest rate.

But, among banks that have both high-yield savings accounts and money market options, high-yield savings accounts often come out on top.

Money market account interest rates vs. CD rates

Money market account interest rates are generally lower than average CD rates. Also, keep in mind that CDs pay fixed rates while money market accounts have variable interest rates. This means that the CD rate will stay the same for the term that you've chosen, but money market account rates can fluctuate at any time.

Average money market rate by bank

Each bank sets different rates for its money market accounts. Money market accounts are offered at both brick-and-mortar banks and online banks. Here are current money market rates offered by several popular banks. 

Some banks offer higher interest rates for people with several accounts at one bank. Check with your bank to see if a special relationship rate could apply to your money market account. 

Money market account benefits and drawbacks

Money market accounts come with some pros and cons. Some perks of money market accounts, like additional liquidity compared to savings accounts and federal insurance, could make them a good choice. But they might also come with drawbacks, such as minimum balance requirements and monthly service fees.

Federal insurance and money market accounts

Like most deposit accounts, money market accounts are federally insured accounts, covered by either the FDIC for banks or the NCUA for credit unions. With FDIC insurance and NCUA insurance, your money will be covered in case of a bank failure for up to $250,000 per depositor. This makes money market accounts low-risk compared to investments.

In contrast, the similarly named money market funds, while low risk for a mutual fund, are still more risky than a money market account. You won't lose money in a money market account, but you could with a money market fund.

Money market account liquidity

When it comes to liquidity, money market accounts work as a cross between checking accounts and savings accounts. Money market accounts frequently come with things like check-writing privileges, ATM access, and debit cards, making it easier to withdraw your money from a money market account than a savings account.

At the same time, money market accounts frequently have monthly withdrawal limits. Your account might only let you withdraw money a certain number of times each month. If you withdraw money more often than your account allows you, you could end up paying withdrawal fees.

Money market accounts and bank fees

Finding money market accounts that let you avoid bank fees might be more difficult than if you were looking for a traditional savings account. Many money market accounts come with monthly service fees that could cut into your profits, and money market accounts are more likely to have tiered interest rates, which means you'll have an ongoing balance requirement if you want to earn the highest interest rate.

How to find the highest money market rates

Money market account rates are generally more competitive at online banks than at brick-and-mortar banks. Credit unions also pay high interest rates on money market accounts, but you may need to meet certain membership requirements to join (That said, there are a couple of credit unions that anyone in the U.S. can join.)

While money market account rates can help narrow down options, they shouldn't be the only thing you use to determine your top pick. Money market accounts have other features that should be considered as well. For example, financial institutions set different minimum opening deposits for money market accounts. The standard minimum opening deposit requirement across most financial institutions is $1,000. Some banks, however, let you open a money market account with $0. 

Common bank fees are another feature that can greatly impact your account decision. Some banks charge monthly service fees if you don't have a certain balance, while others do not charge any monthly service fees. 

Strategies for maximizing returns with money market accounts

You can use the following tips to maximize returns on money market accounts: 

• To maintain the highest rate on a tiered interest money market account, review your bank statement regularly or set balance alerts.
• To avoid monthly bank maintenance fees, choose a fee-free money market account or meet the monthly activities to waive monthly fees. 
• Compare money market account rates from various financial institutions to make sure you're getting a high rate. 

Money market account rate FAQs

Liz Knueven

Personal Finance Reporter

Liz was a personal finance reporter at Insider.  Before joining Insider, she wrote about financial and automotive topics as a freelancer for brands like LendingTree and Credit Karma.  She earned her bachelor's degree in writing from The Savannah College of Art and Design. She lives and works in Cincinnati, Ohio. Find her on Twitter at @lizknueven.

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Sophia Acevedo

Banking Editor

Sophia Acevedo is a banking editor at Business Insider. She has spent three years as a personal finance journalist and is an expert across numerous banking topics. ExperienceSophia leads Personal Finance Insider's banking coverage, including reviews, guides, reference articles, and news. She edits and updates articles about banks, checking and savings accounts, CD rates, budgeting, and general saving. Sophia was also a part of Business Insider's 2024 series "My Financial Life," which focused on telling stories that could help people live and spend better.Before joining Business Insider, Sophia worked as a journalist at her college newspaper and was a freelance writer. She has spent seven years writing and editing as a journalist.Sophia was nominated for an Axel Springer Award for Change in 2023 for her coverage of ABLE Accounts, tax-free savings accounts for people with disabilities. She was also a winner of a 2018 California Journalism Awards Campus Contest for her photography.She loves helping people find the best solutions for their unique needs and hopes that more people will find the tools to solve their financial problems. She’s inspired by stories of everyday people adapting to their financial circumstances and overcoming their fears around money.ExpertiseSophia's expertise includes:

• Bank accounts
• Savings and CD rate trends
• Budgeting
• Saving
• How banks operate

EducationSophia graduated from California State University Fullerton with a degree in journalism and a minor in political science.Sophia is a member of the National Association of Hispanic Journalists.She is an avid reader across a variety of genres, and she started running in 2021. She ran in the 2024 Los Angeles Marathon.

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Kit Pulliam

Banking reporter

Kit Pulliam (they/them) is a banking expert who specializes in certificates of deposit, savings accounts, and checking accounts. They’ve been reporting, editing, and fact-checking personal finance stories for more than four years. ExperienceIn college, Kit worked as an undergraduate research assistant in a psychology lab. While there, they found that they were passionate about writing and helping others write about topics that matter.Before Business Insider, Kit was an editorial specialist for Tax Analysts, diving into the tax code to help readers get the best information about a confusing but necessary subject.They find banking similar to taxes in that way: There are some things everyone needs to know because just about everyone needs to work with a bank — and you don’t want to end up with an account that doesn’t serve your needs.As interest rates change, they enjoy the fast pace of reviewing rates for products like CDs and high-yield savings, which can change daily and have a direct impact on readers’ money.Their work has been featured in Business Insider and MSN. They were part of the My Financial Life series with Business Insider.ExpertiseTheir expertise includes:

• Certificates of deposit
• Savings accounts
• Checking accounts
• CD rates
• Bank reviews

EducationKit is an alumnus of Vanderbilt University, where they studied English and psychology and received the Jum C. Nunnally Honors Research Award for their senior thesis.Outside personal finance, Kit enjoys reading, film, video games, and cross stitching. They are based in the DC area.

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