Conclusion
As you’ve seen, money market accounts can pay a competitive interest rate on your funds while offering different ranges of user-friendly features – if, that is, you choose from one from these industry leaders rather than just opening any money market your current banking offers.
Patelco Credit Union is a winning choice across the board, offering plenty of features with no fees or minimums, even offering free check orders and the ability to make Zelle payments. You’ll do even better with a Patelco Money Market Account if your balance is typically below $25,000, as you’ll earn the highest APY currently available.
If other features are more important to you, such as high monthly withdrawals, debit card access, or a great interest rate on larger balances, one of our other winners should answer your questions. needs and give you peace of mind that you’re earning as much as you can, with the lowest possible cost, for the features you value the most.
Compare providers
| Financial institution | Why we chose it | Key benefit |
|---|---|---|
| Prime Alliance Bank | Best overall | Exceptional interest rate for any balance |
| Patelco Credit Union | Ideal for small sales | Higher APY for small balances |
| Axos Bank | Ideal for debit users | Full debit card access with no monthly transaction limit |
| Allied bank | Ideal for ultimate flexibility | Access to your funds through all possible channels |
| Sync Bank | Ideal for frequent transactions | More than double the typical number of transactions allowed |
Frequently Asked Questions
What are the limits of a money market account?
Despite all their useful features, money markets generally do not replace your checking account. This is because in exchange for a higher interest rate, most money market accounts limit the number of trades you can make in a month. Also, only some offer ATM and debit card privileges.
They are also slightly different from savings accounts. Although they can be considered to offer more functionality and accessibility than a savings account, which does not offer check writing or a debit card, the best money market accounts do not pay as much. of interests that highest earning high yield savings accounts.
Why should you use a money market account?
Money market accounts are well suited to bank customers who have money in savings that they would like to keep separate from their transactional current account and for whom the ability to issue checks is useful. Because our recommended money market accounts pay a decent interest rate on your funds, it’s a good place to stash away the money you don’t need on a day-to-day basis. And if your financial life involves a regular check or two that you write and send each month, a money market can serve as the perfect hybrid between a savings account and a checking account.
How safe are money market accounts?
Money market accounts offered by banks and credit unions are just as safe as any other deposit accounts offered by these institutions, such as checking, savings, and certificate of deposit accounts. This is because the vast majority of establishments are insured at the federal level by the FDIC for banks and NCUA for credit unions.
This means that even if the institution fails, up to $250,000 per account holder is insured by the US government. Just make sure the institution where you open your money market has the FDIC or NCUA member logo or text.
Be aware that brokerage firms also offer money markets, and typically these are not federally insured as they are investment accounts rather than deposit accounts. So if protecting your money will help you sleep better at night, be sure to open your money market account at a federally insured bank or credit union.
Are money market accounts taxed?
Interest paid on a money market account is taxed in the same way as interest paid on any other type of bank account. Whether you earn money in a savings, checking, or CD account — or a combination — all of that interest will be reported to the IRS at the end of the year as interest income, which is taxed the same as your regular income.
How we choose the best money market accounts
In order to be able to serve as many readers as possible, we began our research by examining only money market accounts available nationwide. This necessarily means that accounts can be opened online from anywhere in the country. About 120 accounts made that first cut.
We then sorted this list by interest rates, as the best accounts will be those in the upper echelon of earning capacity. This filter distilled our list to about two dozen accounts that currently pay 0.50% APY or more.
Finally, we dug into these to find ones that charge no monthly fees, have reasonable minimum balance requirements, and offer an attractive combination of withdrawal options and limits, resulting in our five winners above. .