Money market rates vary by bank and change almost daily
There is no single "current" money market rate. The rate you see depends on which bank you check, how much you deposit, and what day you look. Banks set their own rates based on what the Federal Reserve does, but they do not all move at the same time or by the same amount.
Right now, money market account rates at large national banks typically range from 0.01% to 0.50% annual percentage yield (APY). Credit unions and online banks often offer higher rates—sometimes 4% to 5% APY—but the exact number changes weekly. The only way to know what you would actually earn is to visit the bank's website or call and ask for their current rate on the account size you plan to deposit.
Rates move because the Federal Reserve sets a target range for the federal funds rate, which is the interest rate banks charge each other for overnight loans. When the Fed raises that range, banks eventually raise what they pay depositors. When the Fed lowers it, banks lower deposit rates too. The lag between a Fed move and a bank's response can be days or weeks.
Key Takeaways
- Money market rates differ between banks and change frequently, so the rate at your bank may be different from the rate at another bank on the same day.
- Online banks and credit unions typically offer higher rates than large national banks, but you should compare current rates directly rather than relying on general ranges.
- The Federal Reserve's decisions influence all money market rates, but banks do not raise or lower rates at the same time.
- Your actual rate depends on your account balance—many banks pay higher rates on larger deposits.
How the Federal Reserve influences what banks pay
The Federal Reserve does not set deposit rates directly. Instead, it sets a target range for the federal funds rate—the rate banks charge each other for short-term loans. Banks use this as a signal for what to pay depositors and charge borrowers.
When the Fed raises its target range, banks have more incentive to raise deposit rates because they can earn more by lending money out. When the Fed cuts its target range, banks lower deposit rates because lending becomes less profitable. However, banks do not move in lockstep. A large national bank might wait weeks to raise rates after a Fed increase, while an online bank might raise rates within days to attract deposits.
The Fed meets eight times per year to decide whether to raise, lower, or hold its target range steady. You can find the Fed's current target range and meeting schedule on the Federal Reserve's website.
Why rates differ so much between banks
Banks compete for deposits in different ways. A large national bank with thousands of branches may pay lower rates because customers value convenience and brand recognition. An online bank with no physical locations has lower overhead costs and can afford to pay more to attract deposits from people willing to bank online.
Credit unions, which are member-owned rather than shareholder-owned, sometimes pay higher rates because they return profits to members instead of shareholders. However, credit unions have membership requirements—you may need to live in a certain area, work for a certain employer, or belong to a certain organization to join.
Banks also tier their rates by balance. A bank might pay 0.05% APY on balances under $10,000 and 0.35% APY on balances of $100,000 or more. This means the rate you earn depends not just on which bank you choose, but on how much you deposit.
How to find the current rate at a specific bank
The most reliable way to find a current rate is to visit the bank's website and look for the money market account disclosure page, often called a "rates and fees" or "account rates" page. This page lists the APY and any balance tiers. Rates posted online are usually current within a day.
If you cannot find the rate online, call the bank's customer service line and ask for the current APY on a money market account for your intended deposit amount. Be specific about the balance—a $5,000 deposit may earn a different rate than a $50,000 deposit at the same bank.
Some comparison websites list money market rates from multiple banks, but these lists update at different speeds and may lag behind actual rates by a few days. Use them as a starting point, then verify the rate directly with the bank before you open an account.
What happens to your rate after you open the account
Your rate is not locked in for the life of the account. Banks can change money market rates at any time, and they usually notify you by email or mail when they do. Some banks lower rates without much notice; others send a formal disclosure.
If your bank lowers its rate and you find a better rate elsewhere, you can close the account and move your money. There is no penalty for withdrawing from a money market account, though some banks require a minimum balance to avoid a monthly fee. Check the account's terms before you open it to understand what happens if your balance drops.
Rates can also go up. If the Federal Reserve raises its target range and your bank raises deposit rates, your money market account will earn more without you doing anything. This is one reason money market accounts appeal to savers during periods when the Fed is raising rates.
The difference between APY and interest rate
APY (annual percentage yield) is the rate the bank advertises and the number you should use to compare accounts. It includes the effect of compounding—the bank paying interest on the interest you have already earned. Interest rate (sometimes called the nominal rate) is the raw percentage before compounding is factored in.
For money market accounts, the difference between APY and interest rate is usually small because compounding happens frequently (often daily). But APY is always the more accurate number for comparing how much you will actually earn. When you see a rate advertised, it should be labeled APY.
Why money market rates matter less than you might think
The difference between a 0.05% rate and a 4.5% rate sounds huge, but the actual dollars depend on your balance. On $10,000, the difference is about $450 per year. On $1,000, it is about $45 per year. If you are saving a small amount, the convenience of your current bank might matter more than chasing the highest rate.
However, if you have $50,000 or more sitting in a savings account earning 0.01%, moving it to a money market account earning 4% would earn you roughly $2,000 more per year. At that balance, the rate difference is worth the effort to switch.
Also consider how long you plan to keep the money in the account. Money market accounts are meant for money you might need within a few months to a year. If you are saving for retirement decades away, a money market account is not the right tool—you would typically use a different investment. If you are saving for something you might need soon, a money market account protects your principal while earning whatever the current rate is.
Frequently Asked Questions
What is today's money market rate?
There is no single rate for today. Each bank sets its own rate, and rates change frequently. To find the current rate, visit your bank's website or call customer service and ask for the APY on a money market account for your deposit amount. Rates at online banks and credit unions are often higher than rates at national banks.
Will money market rates go up or down?
That depends on what the Federal Reserve does. If the Fed raises its target rate, banks typically raise deposit rates over time. If the Fed cuts its target rate, banks typically lower deposit rates. The Fed's next meeting date and recent decisions are published on the Federal Reserve's website, but predicting future rate moves is difficult even for economists.
Is a money market account worth it if rates are low?
It depends on your balance and your alternatives. If you have $50,000 or more, moving it from a savings account earning 0.01% to a money market account earning even 1% is worth the switch. If you have $1,000, the difference is small enough that convenience might matter more. Compare your current rate to rates at other banks to decide.
Can I lock in a money market rate?
No. Money market account rates are variable, meaning the bank can change them at any time. If you want a may provide rate, you would need a certificate of deposit (CD), which locks in a rate for a set period. The tradeoff is that you cannot withdraw from a CD early without a penalty.
Why do online banks pay more than big banks?
Online banks have lower overhead costs because they do not operate physical branches. They can afford to pay higher rates to attract deposits. Large national banks pay lower rates partly because customers value the convenience of branches and the brand name, so the bank does not need to compete on rate alone.