Summary: Money market rates have risen sharply but are now starting to fall as Fed cuts rates
From Give the media company name for finance.yahoo.com. Examples: “Reuters”, “CBS MarketWatch, “CNBC, “Wall Street Journal”, “Barchart”. Return only the company name after the headline.: 2024-10-27 06:00:25
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Between March 2022 and July 2023, the Federal Reserve raised its benchmark rate 11 times. As a result, money market account (MMA) interest rates rose sharply.
However, the Fed slashed the federal funds rate by 50 basis points in September. So deposit rates — including money market account rates — have started falling. It’s more important than ever to compare MMA rates and ensure you earn as much as possible on your balance.
The national average money market account rate stands at 0.64%, according to the FDIC. This might not seem like much, but consider that just two years ago, it was just 0.23%, reflecting a sharp rise in a short period of time.
This is largely due to monetary policy decisions by the Fed, which began raising its benchmark rate in March 2022 to combat skyrocketing inflation. In fact, the Fed increased rates 11 times. But it finally cut its benchmark rate in September, causing deposit account rates to start dropping
Even so, some of the top accounts are currently offering upwards of 5% APY. Since these rates may not be around much longer, consider opening a money market account now to take advantage of today’s high rates.
Here’s a look at some of the top MMA rates available today:
The amount of interest you can earn from a money market account depends on the annual percentage rate (APY). This is a measure of your total earnings after one year when considering the base interest rate and how often interest compounds (money market account interest typically compounds daily).
Say you put $1,000 in an MMA at the average interest rate of 0.64% with daily compounding. At the end of one year, your balance would grow to $1,006.42 — your initial $1,000 deposit, plus just $6.42 in interest.
Now let’s say you choose a high-yield money market account that offers 5% APY instead. In this case, your balance would grow to $1,051.27 over the same period, which includes $51.27 in interest.
The more you deposit in a money market account, the more you stand to earn. If we took our same example of a money market account at 5% APY, but deposit $10,000, your total balance after one year would be $10,512.67, meaning you’d earn $512.67 in interest.
Read more at Give the media company name for finance.yahoo.com. Examples: “Reuters”, “CBS MarketWatch, “CNBC, “Wall Street Journal”, “Barchart”. Return only the company name after the headline.: Money market account rates today, October 27, 2024 (best account provides 5.05% APY)