Best Money Market Yields: Understanding Money Market Accounts And Which Bank You Should Choose

For a long time, banks only offered two types of accounts: checking and savings. If you wanted to earn interest, you would have to rely on long-term savings accounts. Today, there are numerous options, including CDs and money market accounts. The latter is a hybrid between a savings account and a checking account: it allows you to write only a limited number of checks each month or make limited debit purchases, however, your money will earn higher interest than with a savings account. You should first shop around for the best money market returns before opening an account.

And you’ll find the best returns if you deposit your money in an online bank. If you stick with a traditional bank, you’ll get MUCH LESS than a 1% fee on deposits under $100,000. With an online bank, you could get at least 1%.

Note: Whatever you do, don’t confuse money market accounts with money market funds. The latter is a type of investment fund that is not backed by the FDIC. It may be something that interests you at some point, but for the least amount of risk possible, it’s best to stick with an online bank that offers the best money market returns.

You may be required to maintain a minimum balance, which varies from bank to bank. You are also expected to maintain that given balance in the account at all times (for the agreed duration) to avoid fees and continue to earn good returns.

The best money market returns require no monthly fees

You should NOT have to pay any monthly maintenance or service fees. Scratch any bank that tries to charge you for that. That is why you should take the time to read the terms and conditions, although they can be tedious.

There will most likely be a penalty fee if you fall below the minimum balance requirement, so only put money in that you’re absolutely certain you won’t spend for at least a year.

Here are some of the banks offering the best returns in the money market right now (just remember to research each one individually and read the terms and conditions):

• TIAA Bank: 1.85% introductory rate

• Electronic access for investors – 1.75% APY

• Sallie Mae – 1.75% APY

• CIT Bank – 1.85% APY (only $100 memory required)

Overall, CIT Bank is probably your safest bet for the best money market returns. You will earn a high APY regardless of the balance. There are no maintenance fees to worry about and your money is FDIC insured.