bank rates

Money Market Account Or 1-Year CD?

coins, cash and a wallet spread out on a tableTwo months ago, we wrote that nationally available money market accounts were performing better than savings accounts or 12-month CDs.

That argument is weakening.

Since then, one of the top banks has cut its MMA rates, and three more are getting ready to follow suit.

In fact, come the second half of this month, just one nationally available deal will pay more than 1% APY – and that’s a promotional rate that lasts just six months.

So, here’s our new take: Get a 1-year CD. Three banks offer a 1.05% APY deal to all savers. This is better because it’s guaranteed money.

If you prefer a liquid account, here are the best MMA accounts today:

The Yield Pledge Money Market from EverBank (www.everbank.com) pays a guaranteed 1.10% APY for the first six months after you open your account on balances to $50,000. After that, you’ll earn the bank’s standard rate, currently set at 0.61% APY.

You need to deposit at least $1,500 to open a money market account at EverBank, but don’t need to keep that much in the account to earn interest. The account has no monthly fee. The bank is based in Jacksonville, Fla.

The other three leaders – Evantage Bank (www.evantagebank.com), AmericaNet Bank (www.americanetbank.com) and Redneck Bank (www.redneckbank.com) – currently pay 1.10% APY but have already announced they’ll be slicing rates on Sept. 19 to 0.90% APY.

You don’t need to deposit a certain amount to open an account or earn interest at any of the three banks. The banks are owned by an Oklahoma banking family.

They aren’t the only banks slashing MMA rates. In recent days, AmTrust Direct (www.amtrustdirect.com), a perennial MMA leader, cut rates from 1.05% APY to just 0.80% APY.

There is one bright spot among MMAs. State Bank of India-Chicago (www.sbichicago.com) has joined the ranks of MMA leaders, paying 1.00% APY for its money market accounts.

It takes a $2,500 minimum deposit to open an account at State Bank of India-Chicago. Although you don’t need to keep that much in your account to earn interest, if your balance drops below $2,500, you’ll pay a $10 monthly fee.

You can open an account by printing an online application and mailing it in. The Chicago branch of State Bank of India, that country’s largest bank, is FDIC-insured and operates independently of other U.S. branches.

Compare these offers with the best money market accounts offered by scores of banks in our database.

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