Best Money Market Accounts

    Best money market account rates August 2018

    Best Money Market Accounts
    Best Money Market Accounts

    A money market account is a type of savings account that pays a higher annual percentage yield compared to a traditional savings account. It also allows the account holder to draw a limited number of checks every month. If you want an account that provides higher yields and has no access restrictions, opening a money market account can be the best option. Most money market accounts offer very attractive rates. The interest rates vary from one bank to another with the best money market savings accounts paying as high as 2.26% APY. Some accounts require customers to pay a high amount as minimum deposit. If you cannot afford a high amount to pay for initial deposit, you still have the option to look for other banks with flexible requirements. In a money market account, the interest rate is usually compounded either on a daily or monthly basis. A money market account that pays the best rates will guarantee you a return on investment while ensuring that your money is secure.

    Is a money market account the best for you?

    Before deciding if a money market is the best choice for you, it is important that you first weigh your options. With the best money market rates, you will be able to save your money while getting high interest rates on your savings. When it comes to traditional banks, very low rates of interest are paid on money market accounts. Lucky enough, you don’t have to go for such unattractive rates when there are online money market accounts that pay a higher yield. For instance, if you put $50,000 in a traditional bank savings account that offers a 0.04% rate, you will get an interest of $20 in a period of one year. If you put the same amount of money in the best money market accounts that pay 1.50%, the interest will be $750. Another advantage of online money market accounts is that you can easily open and fund the account in as little as ten minutes.

    Best money market accounts

      1. Capital One 360
        With a Capital One 360 money market account, there are two tiers of interest rates. This means that the higher the opening balance the higher your yield will be. If you have an account of up to $9999.99, you will earn a 0.85% APY while accounts that have more than $10,000 have an APY of 1.85%. Savers are not required to pay an initial deposit but still, there must be some money in your account, even if it is just a dollar to consider the account officially opened. Deposits can be made by mail, over the phone or through electronic transfer. You can also use the bank’s mobile app to access your account online. Withdrawals can be made online or over the phone. The money market account does not charge annual or monthly fees.
      2. UFB Direct
        This is also among the money market accounts with the highest percentage yield. Savers are required to pay a minimum deposit amount of $5000 and the same amount has to be kept in the account to avoid a 10% monthly fee. A UFB Direct money market account has a 1.60% APY. The bank, which offers all its services online provides check writing privileges and a visa debit card for free to its customers. However, customers are only limited to six transactions a month. You also won’t be charged if you withdraw money with an ATM card.
      3. Discover Bank
        A Discover Bank money market account pays an APY of 1.60% for savers who have a balance of less than $100,000. If you deposit a higher amount, the rate increases to 1.65%. The online bank also has higher ratings on its Android devices and mobile app on iOS. If you have a money market account from Discovery, you can write checks and purchase products and services with your debit card. However, the transactions are only limited to six every month. You will be required to pay an initial deposit of $2,500 in the money market account. If you do not have that high amount for a minimum opening deposit, then you don’t have to use your debit card or write checks. When you make frequent withdrawals and the balance drops to a lower amount, you will incur a monthly maintenance fee of $10.
      4. TIAA Bank
        Formerly known as EverBank, TIAA Bank money market savings account provide a high introductory rate of 1.60% for accounts with balances of up to $250,000. Savers can benefit from this rate for up to a year before a 1.0% standard rate is introduced for savers who have a balance of less than $10,000. The minimum opening balance for the money market account is $5,000. The bank does not charge for ATMs and monthly maintenance fee. When opening a TIAA Bank money market account, you will be required to pay a $1,500 initial deposit. But even with the high interest rates, there are no monthly fee charges which make it a wiser move for savers. You can use a TIAA Bank ATM card for free throughout the country.
      5. Bank of Internet USA
        Compared to other financial institutions that offer money market accounts, Bank of Internet USA offers savers a chance to earn high yields without necessarily maintaining a minimum balance. The account also does not charge a monthly fee and borrowers can earn interest of up to 1.05% APY. The money market account pays more interest compared to the banks’ high yield savings accounts. There is also more flexibility in getting access to cash. Just like a money market account from UFB direct, savers get a free visa debit card and limited free check writing abilities. With these features, you can use your savings as a checking account while earning interest. But such easy access to funds encourages overspending which is also a factor that you need to consider before opening a money market account with bank of internet USA. The online bank does not have in-person branches. With the high APY and no monthly fee and minimum monthly balance requirements, a Bank of Internet USA money market account is worth considering.
      6. Sallie Mae
        Sallie Mae is mainly known for servicing student loans, but it also has other banking features which include a 1.90% APY money market account. There is no minimum deposit required and you can write checks directly from the account. Savers also don’t have to worry about monthly or annual fee charges. You can make deposits by transferring funds electronically, through direct deposit, mailing in a check or depositing check electronically. The funds in the money market account can easily be transferred to your linked bank account. If the account has insufficient funds, you will be charged a $19 fee for overdrawing. Sallie Mae can be the best option for quick transfers and low overdraft penalties.
      7. CIT Bank
        A CIT Bank money market account pays an APY of 1.85%. Savers need to pay $100 for opening the account and start earning. There are no monthly maintenance fee charges. But if you want an option that allows you to write checks with a money market account, this may not be the best choice for you. The account can be funded through mobile check deposit, ACH or directly mailing a check to the bank. You can easily access funds through online banking by use of a mobile banking app. However, transactions are limited to six per statement cycle. The money market account can be a good option for savers who prefer an online-only experience.
      8. Ally Bank
        Ally Bank is among the most popular online banks with a high paying money market account. If your daily balances are less than $5,000, you will earn an APY of 0.90%. If the minimum daily balance is more than $25,000, you will earn an APY of 1.00%. Although the bank does not have the highest interest rate, they have a competitive overall package. This is especially when you link your money market account to the bank’s checking account. The checking account does not require a minimum balance and it also doesn’t charge a monthly fee.
      9. Virtual bank
        Virtual Bank offers the highest introductory rate on their money market accounts. This rate is however offered for 12 months where after a standard rate is applied. By depositing a minimum amount of $100, you will earn an APY of 2.01%. There is no minimum balance required for you to earn the APY but you will need to maintain a balance of $100 to avoid a $5 monthly service charge. Virtual Bank money market account does not have check writing abilities, but money can be transferred in and out of the account through ACH.
      10. AbleBanking
        The money market account pays a 1.85%APY and a minimum deposit of $250 is required to open the account. This is a convenient minimum deposit for a money market account making it one of the best options to start saving without paying too much as opening balance. However, the money market account can only be linked to one external U.S bank. This means that you can transfer money from just one location. The positive side is that transfers are fast. Same day transfers occur within a day on AbleBanking accounts. If you make transfers to and from an external bank, it will only take 2 to 3 business days compared to other banks that can take up to 10 days. The bank also offers a platform for charitable giving. If for instance, you open a new account, $25 is donated to a charity of your preference.

    Money market vs. savings account

    In the past years, money market accounts were known to carry high risks and high returns. But after the 2008 financial crisis, everything changed. Currently. Money market accounts are insured by FDIC up to $250,000 per institutions per individual. Interest rates in online savings account and money market accounts are also similar and you can choose either of the two accounts. Since money market accounts have check writing capabilities, the rates of interest are slightly lower. Ally, for instance, pays an APY of 1.35% of a savings account and 0.90% APY on a money market account with check writing capabilities. A money market account, however, is the best place for you to store money that you may need to use immediately.

    How to find the best money market account

    Once you decide that a money market account is the best choice for you, here are some of the things you should bear in mind.

        • Interest rates
          Money market accounts are known to bear low risk. When looking for a money market account, it is important that you compare rates from different banks, online money market accounts and credit unions. The account with a higher yield is a more attractive choice. Money market accounts can be a perfect solution for customers who want to ensure that their money is safe while earning returns from their savings. Generally, online money market accounts pay a higher rate compared to those in large banks. However, you also should take note of promotional rates. Introductory rates may sound attractive, but you should ensure that the rate offered after the promotional period is over is equally competitive.
        • Minimum deposit requirements
          Interest rates are not the only important factor to consider in a money market account. Many money market accounts have minimum deposit requirements. For you to get a high yield, you have to maintain a high balance. If you don’t have a large sum of money to open the account, your options will be limited. But there are also banks where you will be required to pay a small deposit and others like Sallie Mae for instance that does not have minimum deposit requirements.
        • Balance requirements
          Some institutions charge a fee for customers who do not maintain the required minimum balance in their account. When comparing money market accounts, consider the minimum balance requirement from different money market accounts. Ensure that you only open an account where you can meet the requirements to avoid being hit with fees. Some banks don’t have monthly service fees. Others will require you to maintain a minimum balance of $1,000 or more to avoid fee charges.
        • Withdrawal limits
          The number of withdrawals made from money market accounts is limited by federal regulations. While you will be allowed to deposit money several times, you will be limited to only six withdrawals per month. If you exceed this limit, you might be charged a fee or your account may be closed. But you can still make unlimited withdrawals by use of your ATM card.
        • Financial institutions
          When reviewing features of different money market accounts, you also should compare different banks. A reputable brand name and years of service are especially worth considering. Make sure that the bank’s money market accounts are insured. You also should research the bank’s ratings. This will help you evaluate the dependability of the institution you work with.

    Money market account vs money market funds

    Many people confuse money market accounts with money market funds. It is important to understand both investments to determine which one is the best choice to meet your financial goals.

    Money market accounts are similar to savings accounts. The difference is that funds deposited in a money market account gain a high rate of interest. The funds are also more accessible. Just like a savings account, you will be limited to only six withdrawals every month. Money market account funds are FDIC insured.

    A money market fund on the other hand, is not a bank account but an investment vehicle. Money market funds are not insured by the government. However, it is a requirement that mutual funds should invest in low-risk securities. Normally, money market funds invest in certification of deposits, government securities and other low-risk securities. Besides being highly liquid and low risk, the best money market fund may be a good option for people who want investments options where they are not charged for either entering or leaving the funds.

    Bottom line

    Unless you are one of the people who believe in keeping their business local, online banks are known to offer the best money market rates. Money market accounts are a low-risk choice for your investment. Because money market accounts combine the benefits from checking and savings account, they are more attractive to customers. Besides being able to make regular deposits and withdrawals, you can also write checks from your account. This makes money market account funds more accessible compared to a savings account.

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