bank rates

Best Yield: MMA Vs. Savings Account

Large percentage signThere aren’t many things that distinguish a savings account from a money market account.

You might have a higher minimum deposit requirement on an MMA or more restrictions on how you can access your money on a savings account.

One thing savers used to count on from the best MMAs was a higher yield. Not anymore.

There are more nationally available savings accounts that pay at least 1% APY than there are money market accounts.

In fact, if you discount EverBank (and we explain why you might want to do that here), there are no banks that pay more than 0.95% APY on an MMA.

And things are only getting worse.

Last week, Union Federal Savings Bank (www.unionfsb.com) trimmed its rate from 0.90% APY to 0.85% APY, which leaves us with just five banks paying either 0.90% APY or 0.95% APY.

EverBank (www.everbank.com) has retained its lock on the top spot by paying 1.10% APY on balances to $50,000 with its Yield Pledge MMA and guaranteeing that rate for six months.

You need a minimum deposit of $1,500 to open an account at the Jacksonville, Fla.-based bank. But you’re not required to keep a certain amount in your account to earn interest. And you’ll pay no monthly fees.

After the six-month guarantee period expires, you’ll earn the standard MMA rate, which currently is 0.61% APY.

Balances above $50,000 earn the standard MMA rate.

That automatic rate cut is a major factor to consider. The best savings accounts probably aren’t going to cut rates by half of a percentage point in the next six months, but there’s no guarantee either.

Which leaves us with the one, surefire way to make sure you earn the interest you expect to earn:

Grab a 1-year CD.

The best nationally available deal pays 1.07% APY – better than any of the top savings accounts and just off the mark set by EverBank. Unlike EverBank, though, these certificates of deposit don’t have a built-in rate cut.

Compare these rates to the best money market and savings account rates offered by scores of banks in our database.

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