Money Market Account Rates: What You Need to Know as Interest Rates Fall in 2024

Vijay Singh
3 Min Read

As the Federal Reserve made its third interest rate cut in 2024, deposit rates—particularly money market account (MMA) rates—have started to dip. Understanding how these changes affect your savings and comparing the best MMA rates is more important than ever.

Current Money Market Account Rates

The national average money market account rate currently stands at 0.66%, according to the FDIC. While this might not seem like much, it’s still a significant increase from just three years ago when the average rate was a mere 0.07%. This growth in MMA rates can be traced back to the Fed’s monetary policy actions, which began raising interest rates in 2022 to combat rising inflation. Over 11 rate hikes later, the Fed began reducing its benchmark rate three times in late 2024, leading to the decline in deposit account rates.

However, some high-yield money market accounts are still offering rates above 4% APY—a compelling reason to take advantage of the current rate environment before they drop further.

How Much Interest Can You Earn with a Money Market Account?

The Annual Percentage Yield (APY) on your money market account directly impacts how much you can earn in interest. APY considers not only the interest rate but also how frequently the interest compounds, and in the case of MMAs, it typically compounds daily.

Here’s a breakdown of potential earnings:

  1. Average MMA (0.66% APY):
    If you deposit $1,000 at 0.66% APY with daily compounding, at the end of one year, your balance would grow to $1,006.62. This includes just $6.62 in interest.
  2. High-Yield MMA (5% APY):
    If you opt for a high-yield money market account offering 5% APY, your $1,000 deposit would grow to $1,051.27 by year-end, earning you $51.27 in interest.

The Bigger Your Deposit, The More You Earn

The more you deposit into a money market account, the more you stand to earn. For example, if you deposit $10,000 into a 5% APY account, your balance at the end of the year would be $10,512.67, earning you $512.67 in interest.

Why Open a Money Market Account Now?

As interest rates fall in the wake of the Fed’s actions, the window to take advantage of high MMA rates may be closing. To ensure you maximize your savings, it’s worth comparing the top money market accounts available today from verified partners offering some of the best rates in the market.

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