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For a solid investment, look to money market accounts

If you have a large amount of money in savings, putting that cash into a money market account can significantly increase your earnings. Here's why a solid investment portfolio should include a money market account.

Why a money market account

A money market account is a deposit account. It's similar to a savings account, but a good money market account will typically offer higher interest rates than most savings accounts, typically in exchange for certain minimum balance requirements to open and maintain the account.

For instance, a money market account might require a minimum of several thousand dollars to open, and a minimum balance of $1,000 to avoid fees.

How money market accounts stack up against alternatives

Though money market accounts and savings accounts are closely related, there are some fundamental differences that can make a money market account a far better choice for some.

Savings accounts tend to offer more liquidity by allowing easier and quicker access to your money, but they generally yield a lower interest rate in return. Some money market accounts might restrict your access compared to other accounts -- perhaps you will be limited to a small number of transactions per month -- but money market rates are often worth the trade-off to investors.

Certificates of deposit, also known as CDs, can have higher interest rates than money market rates, but they have many more restrictions than money market accounts. Money invested in a CD remains tied up for a specified period of time before the account matures. If you need to withdraw money during that locked-up period, you ware likely to lose a chunk of your accrued interest.

Finally, it is important to remember that all three options -- savings accounts, certificates of deposit or money market accounts -- are FDIC insured up to $250,000 per account.

How to choose the best money market accounts

Start by comparing high-yield money market accounts. Oftentimes the highest money market rates will catch your attention, but remember, there are other criteria to consider. You should also take into account:

  • Minimum amount required to open
  • Minimum balance required
  • Number of transactions allowed per month
  • Any fees applied

Some money market accounts will offer terms that you can meet easily, given your current banking patterns. For instance, if you can only conduct six free transactions per month with a money market account and you think you'll only use it to deposit your paycheck and pay your mortgage, you won't find the transaction limit very challenging. Narrow down your selection to those money market accounts with restrictions that won't cramp your banking style.

Next, look for the highest money market rates. It's often easy at this point to identify the account that best suits your needs.

Critical difference between "funds" and "accounts"

Keep in mind that money market accounts and money market funds are not the same. Money market funds are investments in the debt market, which are not backed by FDIC insurance -- and the money can't be readily accessed if you can't sell the funds right away. A money market account is an interest-bearing savings vehicle with almost immediate access, so you don't take virtually any market risks up to the FDIC insurance limits.

Money Market Rates

1.19%
Rate
1.20%
APY
$1
Min to earn APY

Advertiser Comments

  • Great Rates + Safety = Peace of Mind
  • Member FDIC
1.19%
Rate
1.20%
APY
$0
Min to earn APY

Advertiser Comments

  • A rate that's 15x better than the national average
  • No minimum balance and no hidden fees
  • Link directly to any existing bank account
1.14%
Rate
1.15%
APY
$0
Min to earn APY

Advertiser Comments

  • Consistently Competitive Rates
  • 24/7 Customer Care
  • Ally Bank, Member FDIC
1.14%
Rate
1.15%
APY
$0
Min to earn APY

Advertiser Comments

  • 100% U.S. Based Customer Service
  • No monthly minimum balance, no monthly fees
  • Open in Minutes
Ultima Bank
Minimum to earn APY $0
2.02% APY
Rates as of 2017-08-11
Advertiser Comments
SMART Savings Account - for young adults 18 yrs or younger, withdrawals prior to 18th See morebirthday may result in a penalty

Type: Savings

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Dollar Savings Direct
Minimum to earn APY $0
1.40% APY
Rates as of 2017-08-10
Advertiser Comments
Dollar Savings Account - apply online- must have a personal checking account in a US See morebank.

Type: Savings

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BankDirect
Minimum to earn APY $10,000
1.35% APY
Rates as of 2017-08-16
Advertiser Comments
BankDirect Online Money Market - Tier $10,000 and greater

Type: MMA

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ableBanking
Minimum to earn APY $0
1.30% APY
Rates as of 2017-08-16
Advertiser Comments
Money Market Savings - up to 6 withdrawals are permitted per month - apply online See more- a division of Northeast Bank based in Maine

Type: MMA

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UFB Direct
Minimum to earn APY $50,000
1.30% APY
Rates as of 2017-08-11
Advertiser Comments
UFB Premium Savings Account offers a rate of 1.30% APY with interest compounded daily - See moreAPY for balances $50,000 and above - Must be new funds to receive stated rate

Type: Savings

Learn More
Sallie Mae Bank
Minimum to earn APY $0
1.30% APY
Rates as of 2017-08-11
Advertiser Comments
Nationwide - Apply online

Type: MMA

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CIT Bank
Minimum to earn APY $1
1.30% APY
Rates as of 2017-08-16
Advertiser Comments
CIT Bank Savings - APY for daily balances $1 to $100,000 - Apply online

Type: Savings

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Salem Five Direct
Minimum to earn APY $0
1.25% APY
Rates as of 2017-08-11
Advertiser Comments
eOne Savings - APY on balances up to $500,000. Companion account to eOne Checking, no See moreminimum balance, no monthly fees, free ATM card, Online applicants only, who do not have existing deposit accounts with Salem Five

Type: Savings

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SFGI Direct
Minimum to earn APY $1
1.21% APY
Rates as of 2017-08-11

Type: Savings

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Popular Direct
Minimum to earn APY $0
1.21% APY
Rates as of 2017-08-11
Advertiser Comments
Popular Direct Savings - $4 monthly fee waived with $500 minimum daily balance

Type: Savings

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EverBank
Minimum to earn APY $0
1.21% APY
Rates as of 2017-08-10
Advertiser Comments
Yield Pledge Money Market - APY for all balances

Type: MMA

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Radius Bank
Minimum to earn APY $2,500
1.20% APY
Rates as of 2017-08-11
Advertiser Comments
Radius High-Yield Savings - APY for balances $2,500 and above - apply online

Type: Savings

Learn More
American Express
Minimum to earn APY $0
1.15% APY
Rates as of 2017-08-16
Advertiser Comments
High-Yield Savings - Bank by phone or online only.

Type: Savings

Learn More
SmartyPig
Minimum to earn APY $10,000
1.15% APY
Rates as of 2017-08-11
Advertiser Comments
SmartyPig Savings - Tier $10,000.01 - $50,000

Type: Savings

Learn More
FNBO Direct
Minimum to earn APY $0
1.10% APY
Rates as of 2017-08-11
Advertiser Comments
Online Savings Act - Rated Kiplinger's Best Online Savings Account, no minimums, no monthly fees, See moremanage accounts securely online

Type: Savings

Learn More
Capital One 360
Minimum to earn APY $10,000
1.10% APY
Rates as of 2017-08-16
Advertiser Comments
360 Money Market - Tier $10,000 or more

Type: MMA

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SmartyPig
Minimum to earn APY $0
1.05% APY
Rates as of 2017-08-11
Advertiser Comments
SmartyPig Savings - Tier $0.01 - $2,500

Type: Savings

Learn More
SmartyPig
Minimum to earn APY $2,500
1.05% APY
Rates as of 2017-08-11
Advertiser Comments
SmartyPig Savings - Tier $2500.01 - $10,000

Type: Savings

Learn More
AloStar Bank of Commerce
Minimum to earn APY $0
1.05% APY
Rates as of 2017-08-16
Advertiser Comments
Limit of six transactions per month - apply online

Type: Savings

Learn More
Dollar Bank Federal Savings Bank
Minimum to earn APY $0
1.00% APY
Rates as of 2017-08-10
Advertiser Comments
Everything Savings - 1.00% APY on balances $20,000 and below when linked with an See moreEverything Checking Account. The rates require Everything Checking with six qualifying monthly posted payments for example: check, Online Banking bill payment, Telephone Banking bill payment, ACH debit, Point-of-Sale transactions (signature or PIN based).- Open online and mail in forms. Available in Pennsylvania, and Ohio market area. Rate collected within: 15222 (PA)

Type: Savings

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iGOBanking
Minimum to earn APY $0
1.00% APY
Rates as of 2017-08-11
Advertiser Comments
iGO Online Savings

Type: Savings

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Ultima Bank
Minimum to earn APY $1,000
1.00% APY
Rates as of 2017-08-11
Advertiser Comments
UBM Direct Savings Account

Type: Savings

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Biscayne Bank
Minimum to earn APY $1
1.00% APY
Rates as of 2017-08-16
Advertiser Comments
Regular Savings - Maintain $1,000 balance each day and avoid a $25 monthly maintenance fee See more- Miami-Dade County, Florida market area only

Type: Savings

Learn More
Main Street Bank
Minimum to earn APY $0
1.00% APY
Rates as of 2017-08-11
Advertiser Comments
Kasasa Saver - Must be linked to a free Kasasa Cash or Kasasa Cash Back See morechecking account - 1.00% APY on balances up to $50,000 - No minimum balances - No monthly service fee

Type: Savings

Learn More
Sallie Mae Bank
Minimum to earn APY $0
1.00% APY
Rates as of 2017-08-11
Advertiser Comments
High-Yield Savings - No minimum balance and no monthly service fees - Nationwide - Apply See moreonline

Type: Savings

Learn More
MySavingsDirect
Minimum to earn APY $0
1.00% APY
Rates as of 2017-08-11
Advertiser Comments
MySavings Account

Type: Savings

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UFB Direct
Minimum to earn APY $25,000
1.00% APY
Rates as of 2017-08-11
Advertiser Comments
UFB Direct High-Yield Savings - Tier $25,000 and above - No monthly maintenance fee

Type: Savings

Learn More
First Internet Bank
Minimum to earn APY $0
0.90% APY
Rates as of 2017-08-11
Advertiser Comments
Money Market Savings - Rate earned on balances from $0 to $250,000 - Transaction limitations See more- apply online

Type: MMA

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The Palladian Private Bank
Minimum to earn APY $0
0.90% APY
Rates as of 2017-08-11
Advertiser Comments
Currently there is a promotional interest rate for Palladian Savings Account which is fixed at See more1.30% for the first six months. After the promotional interest rate ends, the interest rate will be the non-promotional variable interest rate that is offered for Palladian Savings Account at that time (currently 0.90%). There is a minimum initial deposit of $1,000 and maximum initial deposit of $100,000.

Type: Savings

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Chesapeake Bank
Minimum to earn APY $1
0.90% APY
Rates as of 2017-08-02
Advertiser Comments
Clear Sky Savings - Tier $1 - $249,999

Type: Savings

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Colorado Federal Savings Bank
Minimum to earn APY $2,500
0.85% APY
Rates as of 2017-08-16
Advertiser Comments
High Yield Savings - You may access your funds only through ACH (ACH fee applies)

Type: Savings

Learn More
EH National Bank
Minimum to earn APY $100,000
0.85% APY
Rates as of 2017-08-10
Advertiser Comments
Premium Money Market - Tier $100,000 and over

Type: MMA

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EH National Bank
Minimum to earn APY $0
0.81% APY
Rates as of 2017-08-10
Advertiser Comments
Premium Money Market - Tier $0 - $99,999.99

Type: MMA

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Virtual Bank
Minimum to earn APY $0
0.80% APY
Rates as of 2017-08-11
Advertiser Comments
eMoney Market online account

Type: MMA

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Virtual Bank
Minimum to earn APY $10,000
0.80% APY
Rates as of 2017-08-11
Advertiser Comments
eMoney Market online account

Type: MMA

Learn More
Virtual Bank
Minimum to earn APY $25,000
0.80% APY
Rates as of 2017-08-11
Advertiser Comments
eMoney Market online account

Type: MMA

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Amboy Direct
Minimum to earn APY $3,000
0.80% APY
Rates as of 2017-08-16
Advertiser Comments
eSavings - Apply online or by mail, offer not available at branches.

Type: Savings

Learn More
EH National Bank
Minimum to earn APY $0
0.79% APY
Rates as of 2017-08-10
Advertiser Comments
Personal Savings - Must maintain a $1000 balance to avoid monthly $10 fee

Type: Savings

Learn More
Mutual of Omaha Bank
Minimum to earn APY $1,000
0.77% APY
Rates as of 2017-08-11
Advertiser Comments
Online Money Market - Rate/APY for balances from $1,000 - $1,000,000

Type: MMA

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Bank of Internet
Minimum to earn APY $1
0.75% APY
Rates as of 2017-08-16
Advertiser Comments
Money Market Savings Account - No monthly maintenance fees - No minimum monthly balance requirements

Type: MMA

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California First National Bank
Minimum to earn APY $0
0.75% APY
Rates as of 2017-08-16
Advertiser Comments
Money Market Checking - Tier Up to $14,999.99

Type: MMA

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Workers' Credit Union
Minimum to earn APY $50
0.75% APY
Rates as of 2017-08-09
Advertiser Comments
cuSave - Online Savings - Membership is limited to residents of Massachusetts or New Hampshire See moreor those who work for a company that is based in Massachusetts

Type: Savings

Learn More
Nationwide Bank
Minimum to earn APY $100,000
0.75% APY
Rates as of 2017-08-11
Advertiser Comments
Tiered Money Market - tier $100,000 - apply online

Type: MMA

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TIAA Direct
Minimum to earn APY $50,000
0.75% APY
Rates as of 2017-08-11
Advertiser Comments
Money Market -Tier $50,000 -$99,999

Type: MMA

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Capital One 360
Minimum to earn APY $0
0.75% APY
Rates as of 2017-08-16
Advertiser Comments
360 Savings Account - No fees - No minimum balance - Online account

Type: Savings

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Century Bank Direct
Minimum to earn APY $0
0.74% APY
Rates as of 2017-08-16
Advertiser Comments
Online MM Rate - Apply online

Type: MMA

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