Here’s what that means for money market accounts

The Federal Reserve announced on Wednesday that it would keep interest rates at current levels. The decision ended, for now at least, a series of 10 consecutive rate hikes from March 2022 that were aimed at fighting inflation. The pause in rising rates means money market (MMA) account yields will likely hold steady at the highest rates we’ve seen since 2007. The highest MMA rate today is 5.25%.

How Fed Rate Decisions Affect MMA Rates

For the first time in more than a year, the central bank chose not to raise the fed funds rate, keeping the key benchmark in its current range of 5% to 5.25%. Decisions made by the Fed affect the economy in various ways. For example, the federal funds rate shapes the interest rates paid by many types of financial products. This includes the annual percentage yield (APY) that depositors can earn on savings products from their bank or credit union.

Money market accounts are an example of a banking product whose interest rates are determined by central bank policy decisions. With this type of account, depositors benefit from some of the best qualities of checking accounts and savings accounts.

Money market accounts generally offer higher interest rates than traditional savings accounts and can also beat the rates of high yield savings accounts. In addition to this, account holders may be able to write checks or use a debit card attached to the account, usually for a limited number of withdrawals each month.

The best money market accounts currently pay an APY of 4.00% or more, and as of Wednesday, the best money market account available nationally offered a rate of 5.25%. The yields available on the best money market accounts have increased over the past year, in line with the interest rate hikes decreed by the Fed.

What’s next for MMA

Signs that inflation may finally be easing and fears that excessively high interest rates could hurt the economy contributed to the decision to pause the hike cycle in June. However, Fed officials have suggested that Wednesday’s halt to rate hikes is likely to be temporary, with policymakers predicting they will raise the federal funds rate another 50 basis points by the end of 2023.

While Wednesday’s pause did not tip the scales, money market fund rates are variable and subject to fluctuating depending on future economic developments and upcoming Fed policy decisions.

Any further rate increases would likely be good news for people looking to maximize their savings while enjoying check-writing privileges, features that make money market accounts a good vehicle for those looking to save for goals. short term.


With Fed officials suggesting there could be more rate hikes to come this year, it’s possible that money market yields could climb even higher.

Disclosure of rate collection methodology

Every business day, Investopedia tracks rate data from more than 60 banks and credit unions that offer money market accounts to clients nationwide. We determine the daily rankings of the highest earning silver accounts. To qualify for our list, the institution must be federally insured (Federal Deposit Insurance Corp. [FDIC] for banks, National Credit Union Administration [NCUA] for credit unions), and the minimum initial account deposit must not exceed $25,000. The account must also allow the writing of cheques.

Banks and credit unions must be available in at least 40 states. And although some credit unions require you to donate to a specific charity or association to become a member if you don’t meet other eligibility criteria (e.g. you don’t live in a certain area or do not hold a certain type of employment), we exclude credit unions with a donation requirement of $40 or more. To learn more about how we choose the best money market accounts, read our full methodology.

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