This Is the Best Reason to Get a Money Market Account

Money market accounts are probably one of the most useful banking products you've never heard of before. Though they lack the superior PR of checking and savings accounts, money market accounts offer some of the best features of both banking behemoths. 

Indeed, the top money market accounts pair the features of a great checking account, with the earning power of a high-yield savings account. And this unique combination is what makes them absolutely ideal places for your emergency fund.

An emergency fund's best friend

Your emergency fund should contain around six months' worth of expenses. So, even on the low end, we're talking about $10,000-plus. If you're in a high cost of living area, you could be looking at upwards of $30,000. 

What I'm saying is, this is not a small chunk of change. And if you left it wallowing in your sad little 0.004% APY checking account, inflation would Eat. It. For. Dinner.

Our Picks for the Best High-Yield Savings Accounts of 2024

Product	APY	Min. to Earn
American Express® High Yield Savings Member FDIC. APY 3.90% Rate info 3.90% annual percentage yield as of December 9, 2024. Terms apply. Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	3.90% Rate info 3.90% annual percentage yield as of December 9, 2024. Terms apply.	$0	Open Account for American Express® High Yield Savings On American Express's Secure Website.
Capital One 360 Performance Savings Member FDIC. APY 3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening.	$0	Open Account for Capital One 360 Performance Savings On Capital One's Secure Website.
Western Alliance Bank High-Yield Savings Premier Member FDIC. APY 4.46% Rate info The annual percentage yield (APY) is accurate as of November 7, 2024 and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY. Min. to earn $500 to open, $0.01 for max APY Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website. Member FDIC.	4.46% Rate info The annual percentage yield (APY) is accurate as of November 7, 2024 and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.	$500 to open, $0.01 for max APY	Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website.

So, why not stick it in a high-yield savings account? You could get 4% to 5% APY, which easily stands up to inflation. Because what if you need that money in, you know, an emergency? (Not all emergencies take Mastercard, you know.)

You can find money market accounts that easily compete with the top savings accounts on APY. But they'll also offer you what your savings account doesn't: a debit card and checks. WIth these tools, you can access your emergency fund from any ATM at hand, making it far easier to (sometimes literally) throw cash at the problem.

How to find a money market account

Alright, so I'm biased, but a great way to start looking for your own money market account is to check out our writeup on the best money market accounts. You'll see some pretty solid rates.

Alternatively, if you like your current checking account, check to see if the bank offers a money market account with a good APY. (That will certainly make funding your account simpler.) Folks who like their credit card issuers can also check with those banks.

Whichever route you take, make sure you check for new account bonuses. Some banks will offer you extra cash for opening a new account and meeting certain deposit or transaction requirements. These can be worth a few hundred bucks, so it's certainly worth a little sleuthing!

Things to consider

While you're comparing money market accounts, there's a few features to keep in mind:

• APY: If your money market account is going to be worth putting your emergency fund into, it needs a competitive interest rate. Look for something at least higher than inflation (which is around 3.2% right now).
• Minimums: A lot of money market accounts will have minimum balance requirements to open the account. They may also require you to maintain a certain balance to earn the best APY.
• Fees: Money market accounts can charge a lot of the same fees as checking accounts, including monthly service fees. Make sure you can qualify to have these fees waived.

Oh, and while the vast majority of money market accounts come with ATM-enabled debit cards and check-writing capability, a few don't. Double check that your account offers these features.

When not to use a money market account

Money market accounts are a highly underrated financial tool that more of us should be using. But that's not to say that a money market account is ideal for every situation. There are a few drawbacks to money markets that may make a checking or savings account a better fit in some cases.

For example, if you make a lot of withdrawals from your account, then a money market could be a poor fit. Like savings accounts, many money market accounts have monthly withdrawal limits. (The federal Regulation D limit on money market accounts was lifted during the pandemic, but individual banks can still maintain their own limits.)

And if you like to maintain multiple accounts for different savings goals, then a series of high-yield savings accounts could be more manageable than money market accounts due to the balance limits and potential for fees. Consider your needs before deciding which type of account to open.