How to Find the Best Money Market Rates

If you want to keep some cash on the sidelines or in an emergency fund you might as well get the best possible return on your money. Here are some tips on getting the best money market rates.

Aug 17, 2014 at 2:14PM

Source: Flickr user 401(k) 2013.

With the stock market fairly expensive by historical standards, it may make sense to keep some of your money in "cash." This doesn't mean stuffing $100 bills under your mattress, but rather having a portion of your investment portfolio in safe, readily accessible places such as a money market account.

The problem is that money market interest rates can be downright depressing. According to Bankrate, the national average for money market interest rates is a paltry 0.1%, and many of the big banks pay even less than that.

While you're not going to get rich with a money market account, you can achieve better returns than that. With a little homework, you should be able to keep some cash handy while earning a return many times greater than the national average. So why should you use a money market account for your cash, and how do you find the best money market rates?

Why a money market account for your cash?

Money market accounts are a way to save money while receiving some of the benefits of both savings accounts and checking accounts.

Interest rates are generally better with money market accounts than with savings accounts. Banks can offer those rates by typically requiring a higher minimum balance than they do for a savings account and by limiting the number of withdrawals allowed. Federal law limits money market account holders to six withdrawals per month, including checks and transfers but not including ATM withdrawals.

Like a checking account, money market accounts usually allow check-writing ability and a debit card. The limit on withdrawal transactions can make money market accounts slightly less liquid than checking accounts, but still gives you on-demand access to your cash savings.

Just like checking and savings accounts, money market accounts are insured by the FDIC, making them one of the best choices for a truly safe place to keep your savings.

For the best money market rates, look to the Web

While virtually any money market account will come with a better interest rate than you'll find on a savings account from the same bank, rates can vary tremendously from bank to bank. And the best rates are usually offered by Internet-based banks.

A quick search on shows rates of nearly 1% from some institutions. I know 1% is not the type of long-term return you want from your investments, but for cash that's just sitting there, it's far better than nothing -- or next to nothing, which most banks pay. On a $25,000 money market account, this could mean $250 in extra money each year.

For example, Ally Bank offers a money market account paying a 0.85% APR as of this writing. In addition, there is no minimum balance requirement (rare for money market accounts), and the fees are remarkably low. Ally charges just $9 for an overdraft and just $10 if you make too many withdrawals.

There are many other exceptional rates and terms out there; check out what's currently available over at Bankrate. If you have a large amount of cash to deposit -- say, $25,000 or more -- you may qualify for an even higher interest rate from some banks.

Other things to consider

A high interest rate is nice, but it doesn't tell the entire story. Other factors to consider are minimum balance requirements, the potential for fees, convenience, and customer service.

Make sure the minimum balance requirement for the account you choose gives you sufficient "wiggle room" so that if you need to access some of your money you won't fall below the minimum, which can trigger fees. Look into how much it will cost you if you fall below the minimum balance or make too many withdrawals in a month.

Also keep in mind that numbers aren't everything. If you think you'll need ready access to your money on a regular basis, make sure the institution you choose offers a convenient way to withdraw cash. National banks have thousands of branches and ATMs, while local credit unions and Internet-based banks could have very limited options.

Customer service is also something to consider. Generally, you'll get more personal service from local banks, while the national banks vary greatly in their customer satisfaction. offers reviews of the banks, and it's worth checking out the strengths and weaknesses of your prospective institution before opening an account.

The takeaway

A money market account can be a great way to keep your reserve funds safe and keep some investment cash on the sidelines while still earning a decent return and maintaining access to your money. And while it's nice to see your savings grow, be sure to read the fine print rather than simply chasing the best money market rates.

How to get even more income during retirement
Social Security plays a key role in your financial security, but it's not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers