Interest rates are at an all-time low. As of January 10, 2013, the national average for money market account yields is just over 0.10%. But don’t give up on them just yet. You can earn up to 10 times the national average just by looking online.
Money market accounts are similar to savings accounts in that they earn interest, and limit account holders to 6 withdrawals per month. In exchange for maintaining a higher minimum balance than a savings account will typically require, most money market accounts offer higher yields and many are tiered, meaning the interest rate increases with higher balances. Some also allow check writing on the balance. Check out NerdWallet’s favorite online money market accounts below, or to learn more visit NerdWallet’s FAQ on money market accounts.
Discover Bank - Money Market Account (0.75% APY*)
Discover's website puts it best, "Money Market Accounts offer access similar to a checking account while earning interest rates closer to those of a savings account." Their account takes $2,500 to open and avoid a monthly fee, but you'll also be rewarded for a higher balance. Balances of $100,000+ earn a bumped-up rate. A variety of mobile banking options make this account super convenient to access.
EverBank - Yield Pledge Money Market (0.61% APY*)
EverBank's account offers two things that other online money market accounts simply do not. The first is a 6-month bonus rate that will raise your effective yield over the first year of the account. The second great feature is the Yield Pledge, which guarantees that the yield on your money market account will always be in the top 5% of competitive accounts offered by leading banks. That means less time spent chasing rates, and more time watching your balance grow!
Mutual of Omaha Bank - Online Money Market (0.85% APY*)
$5,000 will qualify you to open a money market account online with Mutual of Omaha. They're a well-known name in the insurance industry, but their banking products also provide great options for anyone looking to save some cash. The Online Money Market account earns a top-notch yield, includes free bill pay, and easy online access. Keep in mind, though: this account isn't for everyone. A $10 monthly fee for balances below $5,000 could wipe out interest earnings, and mobile banking is still to come.
Ally Bank - Money Market Account (0.85% APY*)
Ally's banking products are some of the best in the business, offering no monthly fees, no minimum balances, and flexible access to your money. Their money market account is no exception. Along with offering one of the best rates in the nation, Ally allows customers to deposit money and make transfers through a variety of channels, from snail mail to mobile phones and everything in between.
Bank of Internet USA - Money Market Savings Account (0.75% APY*)
Their name says it all: Bank of Internet is a great online option for consumers. The Money Market Savings account can boast no monthly fee or minimum balance, plus you get a free pack of 50 checks upon opening a new account to make use of the accounts check-writing option (up to 6 per month). A small deposit of $100 will get you started.
First Internet Bank - Money Market Savings (0.80% APY*)
This account does incur a potential monthly fee of $5, however the fee can be waived by maintaining a $4,000 minimum balance. First Internet Bank allows customers to deposit checks from home via a scanner, or to access their account information, make transfers and pay bills with a phone via mobile web.
Sallie Mae - Money Market Account (0.90% APY*)
Sallie Mae may specialize in financial products for education, but their core banking products are also excellent alternatives for any consumer. The Sallie Mae Money Market account has simply the best rate available online right now. It also has the benefit of requiring no minimum balance and charging no monthly fee, so you'll be earning a top notch rate from the very first dollar.
Why bank online?
Online banks save a ton of money on personnel and maintenance costs because they have no physical branches. The result is more money for you. Better yet, online savings accounts are surprising easy to maintain. You have to manage your account online, but you can access your money 24/7 and transfer it between accounts anytime. You can’t talk to a representative in person, but they’re always available online or over the phone. And, if you need to withdraw money or deposit checks, you can always do that via mail, usually for free. Thus, if you’re tech-savvy, an online bank is incredibly convenient.
Should you open a money market account?
By federal law, you’re limited to six withdrawals a month with any money market account, which includes those accounts that offer checks. They are a good place to set aside money you might need to access quickly, but ideally would like to save. A money market account is great for building an emergency fund, for example, or setting aside money for a large purchase or vacation.
Looking for an account with a brick-and-mortar bank instead?
Check out our tool to find a money market account closer to home.
*Rates updated weekly