The Best Money Market Account Rates

If you are a fan of money market investments, it’s easy to get depressed by looking at your account statement. Across the board, even the best money market interest rates are the lowest that they’ve ever been. Some research will show that a 1.2% return is about the highest you might expect, although some of the higher rates have a marketing “teaser” component that make the account less compelling after 6 months or so, or have very some interesting rules and requirements. If you are thinking about setting up or moving to a new account, you can achieve those higher rates, but there are some strings attached.

For example: There is one bank out there that offers 2.06%. Not bad, until you look at the fine print. First of all, you need to be a new customer. No existing depositors allowed. In addition, there is a $100,000 minimum. No, that is not a typo (I checked it twice). These bankers do not want to waste time talking to common folk. Bring lots of iron if you want this account. Also, the 2.06% is called a “30-Day introductory rate”, so you can guess what happens after the first 30 days. Interestingly, there are several rate “tiers”, the highest being 1.51% for your >100k balance. There is also a limitation of 6 transactions a month on account activity. I didn’t ask about the fee schedule, but I assure you that it’s structured for folks that are accustomed to tossing $100,000 into a fresh banking account. Whew. Maybe I should start a bank. If I could find 15 customers that wanted accounts like this...

Next example: 2.00%. These bankers went the other way with their minimum balance rules; they have a maximum balance that is subject to the 2.00% rate, at $20,000. Everything over the limit gets treated like checking. Pretty clever, eh? You also must maintain an active checking account (fees), and open the account online with mail-in forms. This is the account to have if you want bragging rights: “You’re under 1% APY on your money market? I’ve been making 2% on my account for years! Tsk, tsk.” Try to avoid mentioning the fact that you’re not earning or compounding anything on two thirds of your account balance.

Here’s a weird one: 1.74%, and you must live locally to set up the account. And you’ll NEED to live locally, because there is also a requirement to make a minimum $50 deposit, in person at the bank, each interest cycle. You’ll probably need to take a vacation day now and again to maintain this account. Talk about relationship banking! A personal visit every month? Try to latch on to an attractive teller staff; you’ll be seeing her often.

The best money market account rates can be all over the 1-2% map. There are good deals out there, but pay strict attention to rules, fees, minimums and maximums. There are some strange fish in these waters; know your bank, read the things they send you, and try to keep it simple.

If you can.