What is the best money market fund right now?
The Bottom Line
While money market funds aren't ideal for long-term investing due to their low returns and lack of capital appreciation, they offer a stable, secure investment option for individuals looking to invest for the short term.
- Brilliant Bank – 5.35% APY.
- BluPeak Credit Union – 5.33% APY*
- UFB Direct – 5.25% APY.
- Amalgamated Bank – 5.25% APY.
- Republic Bank of Chicago – 5.21% APY.
- Merchants Bank of Indiana – 5.00% APY.
- Quontic Bank – 5.00% APY.
- Northern Bank Direct – 4.95% APY.
| Fund | Expense Ratio | 7-day SEC yield |
|---|---|---|
| Vanguard Federal Money Market Fund (VMFXX) | 0.11% | 5.3% |
| Vanguard Treasury Money Market Fund (VUSXX) | 0.09% | 5.3% |
| Vanguard Municipal Money Market Fund (VMSXX) | 0.15% | 3.3% |
| Fidelity Money Market Fund (SPRXX) | 0.42% | 5.0% |
The Bottom Line
While money market funds aren't ideal for long-term investing due to their low returns and lack of capital appreciation, they offer a stable, secure investment option for individuals looking to invest for the short term.
U.S. government money market funds are typically regarded as the safest of the three, and within that category, those with a high concentration of Treasuries—with full government backing—would be exposed to a lower likelihood of default risk.
As of March 2024, no banks are offering 7% interest rates on savings accounts. Two credit unions have high-interest checking accounts. Eligibility for these credit unions is limited according to geographic location and other narrow criteria.
No financial institutions currently offer 7% interest savings accounts. But some smaller banks and regional credit unions are currently paying more than 6.00% APY on savings accounts and up to 9.00% APY on checking accounts, though these accounts have restrictions and requirements.
- Pelican State Credit Union - 6.05% APY on balances up to $10,000. ...
- Credit Union of New Jersey - 6.00% APY on balances up to $25,000. ...
- Fitness Bank - 6.00% APY on balances up to $25,000. ...
- Orion Federal Credit Union - 6.00% APY on balances up to $10,000.
Many accounts have monthly fees
Another drawback to remember is that while they have high yields, money market accounts can also come with cumbersome fees. Many banks and credit unions will impose monthly fees just for the upkeep of your account.
However, the best money market accounts are offering about 4.00% to 5.00% annual percentage yield (APY) right now. “It is possible, and even likely, that money market rates have peaked for this Fed hiking cycle,” Cunnison said. The probability that rates will fall by the end of 2024 is rising, he added.
What are two disadvantages of a money market fund?
Key takeaways
Disadvantages of money market accounts may include hefty minimum balance requirements and monthly fees — and you might be able to find better yields with other deposit accounts.
Money market funds are usually considered to be safe investments, but it's important to remember that these investments are intended for the short term. With maturities of 13 months or less, the funds stay liquid and allow you better access to your money than longer-term investments.
Since you earn more interest for higher balances, money market accounts can be a good place to keep funds for a fairly long period of time, such as more than a year.
There is no direct way to lose money in a money market account. However, it is possible to lose money indirectly. For example, if the interest rate you receive on your account balance can no longer keep up with any penalty fees you may be assessed, the value of the account can fall below the initial deposit.
Type of fund: Consider whether you'd like to invest in a government, prime or municipal money market fund. Municipal money market funds may be particularly appealing for those in high tax brackets. Other fees: Be sure to pay attention to any additional fees you may be charged when buying and selling money market funds.
Money Market Funds
Ultra-conservative investors and unsophisticated investors often stash their cash in money market funds. While these funds provide a high degree of safety, they should only be used for short-term investment. There's no need to avoid equity funds when the economy is slowing.
| Savings Account | APY |
|---|---|
| CIT Bank Platinum Savings | 5.05% APY on balances of $5,000 or more; 0.25% APY on balances under $5,000 |
| Salem Five Direct eOne Savings | 5.01% APY |
| Laurel Road High Yield Savings® | 5.00% APY |
| Wealthfront Cash Account | 5.00% APY |
A money market fund is a mutual fund that invests in short-term debts. Currently, money market funds pay between 4.47% and 4.87% in interest. With that, you can earn between $447 to $487 in interest on $10,000 each year. Certificates of deposit (CDs).
Alas, you're unlikely to garner a savings account that pays you 7% on your cash. In our review of the best high-yield savings accounts, for instance, the top rate is currently offered on the Digital Federal Credit Union Primary Savings account — which has a 6.17% APY on the first $1,000, after that, earn 0.15% APY.
DCB Bank savings account interest rates
DCB Bank offers up to 8% interest on savings accounts with balances ranging from Rs 10 lakh to less than Rs 2 crore. The bank pays 7.75% interest on savings account balances ranging from Rs 10 crore to less than Rs 200 crore. The rates are effective from September 27, 2023.
How to earn 8 percent interest?
High-Yield Savings Accounts: While less common, some high-yield savings accounts or certificates of deposit (CDs) may offer interest rates around 8 percent, though these rates are usually subject to change and may vary by institution.
Digital Federal Credit Union has an account that pays over 6% APY, but you must meet membership requirements to get started. You also won't earn this high interest rate on your entire Digital FCU savings balance. Plenty of savings accounts are available around the U.S. and still offer great rates — over 5% APY.
A stocks and shares ISA is likely to be most suitable. That is unless you will turn 55 within 30 years, in which case a pension might be a better tax wrapper for you. If you're unsure about the time horizon, you could invest in both a pension and a stocks and shares ISA.
- Stocks.
- Real Estate.
- Private Credit.
- Junk Bonds.
- Index Funds.
- Buying a Business.
- High-End Art or Other Collectables.
This means that the investment will take about 12 years to double with a 6% fixed annual interest rate. This calculator flips the 72 rule and shows what interest rate you would need to double your investment in a set number of years.
