Banking products are constantly evolving to offer consumers new and useful combinations. There used to be a time when people only used a checking account to process checks.
Hardly anyone writes checks these days. Instead, top-notch checking accounts have become a one-stop shop for a variety of everyday transactions.
Some high-interest checking accounts even pay interest. However, if you want to earn interest on a transaction account, it’s worth considering money market accounts (MMAs). Think of them as a hybrid between a savings account and a checking account – you get decent interest payments, but without as many restrictions on accessing your money as savings accounts.
If you’re tired of earning low APRs on the money in your checking account, MMAs may be the solution.
Our pick of the best high-yield savings accounts of 2024
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Capital One 360 Performance Savings 
APY 4.25%
Price info
For the most current rates, visit Capital One’s website. The advertised annual percentage rate (APY) is variable and is effective April 11, 2024. Rates are subject to change at any time before or after account opening.
Member of the FDIC. |
APY 4.25%
Price info
For the most current rates, visit Capital One’s website. The advertised annual percentage rate (APY) is variable and is effective April 11, 2024. Rates are subject to change at any time before or after account opening. |
Min. to earn $0 |
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American Express® High-Interest Savings 
APY 4.25%
Price info
4.25% annual percentage rate from August 21, 2024
Member of the FDIC. |
APY 4.25%
Price info
4.25% annual percentage rate from August 21, 2024 |
Min. to earn 1 dollar |
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UFB Portfolio Savings Account 
APY 5.15%
Price info
To ensure you continue to receive the highest interest rate with UFB, you need to keep an eye on their interest rates. Occasionally, the bank opens new accounts with higher interest rates. Existing accounts will need to contact the bank to request to be transferred to one of these new accounts.
Member of the FDIC. |
APY 5.15%
Price info
To ensure you continue to receive the highest interest rate with UFB, you need to keep an eye on their interest rates. Occasionally, the bank opens new accounts with higher interest rates. Existing accounts will need to contact the bank to request to be transferred to one of these new accounts. |
Min. to earn $0 |
What is a money market account?
Money market accounts are a type of deposit account. They pay high annual interest rates and often come with debit cards or check-writing privileges so you can easily access your money.
The best APYs at top MMAs are currently as high as 5.30%. In comparison, top checking accounts pay around 1.00%, maybe even more.
There are many different MMAs. Some require a high minimum balance for the more competitive APYs, while others limit the number of transactions you can make.
The transaction limit is a remnant of a Fed rule called Regulation D. The rule was suspended during the pandemic, but some banks still implement it.
It’s worth shopping around. Some MMAs currently pay APYs of over 5.00%. You’ll find that some allow unlimited deposits and withdrawals and many have no (or very low) minimum deposit requirements. Make sure there are no monthly fees.
Do not confuse MMAs with money market funds, which are a type of investment and are not protected by the FDIC. Most MMAs are offered by FDIC-insured banks and provide the same protection as your savings or checking account.
Money market accounts vs. checking accounts
Simply put, checking accounts offer many more features than an MMA. Debit cards, automatic transfers, a wide network of fee-free ATMs, online banking, mobile banking apps and more come standard with a checking account.
You won’t get this range of features with an MMA, but you will usually get higher interest rates. Money market accounts offer more features than many savings accounts, but not as many as a checking account.
Here are some key differences and similarities between the two:
Money market account
- Often pay higher APYs than checking and savings accounts
- Higher minimum balance requirements may be required
- Issuing checks and/or using debit cards may be possible
- FDIC insured
Current account
- Typically pay low APYs or no interest at all
- Usually low or no minimum deposit requirements are required
- Extensive transaction options
- FDIC insured
There is a rule of thumb that suggests leaving one to two months’ worth of expenses in our checking accounts, but if you want to maximize your interest earnings, you might want to think about whether your MMA and checking accounts could work together.
For example, you could keep a slightly lower balance in your checking account and transfer money from your MMA when needed. Or consider what transactions you can make from your MMA without using your checking account at all.
This level of active management takes effort, and you need to make sure you don’t accidentally overdraw your account. But it could be worth it. To give you an idea, a $5,000 balance in an MMA with a 5.00% APR could earn you over $250 in interest per year.
Key finding
I’m a big fan of maximizing interest on every single dollar. But unfortunately, you probably can’t forget about checking accounts entirely. While they pay low interest, they’re also financial workhorses and useful for many of your daily transactions.
Now that we’re in a period of lower savings rates, it still doesn’t hurt to get creative to get a slightly higher APR, so it might make sense to open a money market account and use it as a supplement to your checking account.
