Money market accounts still offer 4% APY despite nationwide rate slide

On 25 January 2026, savers can still find money market accounts (MMAs) paying 4.00% annual percentage yield (APY) or better, even though the national average has fallen to 0.56%, according to the Federal Deposit Insurance Corporation. The gap between top-tier offers and the average rate has widened since the Federal Reserve reduced its benchmark target rate three times in 2025, putting renewed attention on where consumers keep their cash.

An MMA is an interest-bearing deposit account that generally combines check-writing or debit card access with higher yields than a traditional savings account. Like other deposit products at FDIC-insured banks or National Credit Union Administration–insured credit unions, balances up to the applicable insurance limits are protected against institutional failure. The earnings, however, vary widely from one provider to the next, making rate shopping essential in a declining-rate environment.

Current landscape of MMA yields

The broad market for deposit products has softened since the central bank began easing policy last year. In 2025, the Federal Reserve lowered the federal funds rate at three separate meetings, trimming a combined 150 basis points from the prior peak. As a result, many institutions have gradually pared back the yields offered on new deposits. Even so, a subset of online banks and fintech-partnered institutions continues to post promotional APYs that remain near 4%, a level well above both the national average and inflation expectations.

Industry data show that several MMAs advertise 4.10% APY, the highest widely available rate today. Offers clustered just below that level—between 4.00% and 4.05%—are also common among competitive providers. By contrast, brick-and-mortar banks and regional institutions, which typically set yields close to the industry average, now pay between 0.40% and 0.65% on comparable accounts.

Whether the most generous APYs hold depends largely on future Federal Reserve policy decisions. If short-term benchmark rates continue to fall, deposit pricing may follow. Consumers aiming to capture today’s yields may therefore consider opening or funding an MMA sooner rather than later, bearing in mind any minimum balance or monthly fee requirements tied to the advertised rate.

Impact of APY differences on earnings

The return on an MMA depends on two variables: the stated APY and the compounding frequency. Most MMAs compound interest daily, meaning interest earned each day is added to the principal balance, and subsequent interest accrues on this larger sum.

For illustration, a deposit of $1,000 in an account paying the current 0.56% average APY with daily compounding would grow to $1,005.62 after 12 months—an increase of $5.62. The same deposit in an account paying 4.00% APY would reach $1,040.81, yielding $40.81 in interest over the year. While the dollar difference appears modest at the $1,000 level, the gap scales quickly as balances rise.

At a $10,000 deposit, a 4.00% APY generates $408.08 in interest after one year, versus $56.21 at the national average. For households holding larger cash cushions, the difference can represent hundreds or even thousands of dollars in additional earnings without assuming market risk.

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Factors to review before opening an MMA

Although rate is a primary driver, additional features influence the overall value of an MMA:

• Minimum balance: Some providers require a threshold—often $1,000 or higher—to qualify for the advertised APY. Falling below that level can reduce the rate or trigger fees.
• Withdrawal limits: Federal Regulation D no longer caps certain transaction types, but individual institutions may still restrict the number of electronic transfers or checks allowed each month.
• Fee schedule: Monthly service fees, excess transaction fees, or paper statement charges can erode earnings. A zero-fee structure is common among online banks.
• Access methods: Customers who need ATM or check access should confirm availability. Some MMAs come with debit cards, while others offer ACH transfers only.
• FDIC or NCUA insurance: Verifying deposit insurance limits remains essential, particularly for balances above $250,000 held at the same institution.

Outlook for savers

Market participants largely expect the Federal Open Market Committee to assess incoming economic data before deciding on additional rate changes in 2026. If inflation remains contained and growth slows, policymakers could opt for further easing, pressuring deposit yields. Conversely, a resurgence in inflationary pressures might keep rates elevated for longer, preserving higher MMA returns.

Regardless of the policy path, consumers can mitigate rate uncertainty by monitoring account terms regularly and moving funds when more competitive offers arise. Automated rate alerts or periodic reviews of publicly available data, such as the FDIC’s published national rate averages, can help savers stay informed.

Money parked in an MMA remains liquid and federally insured, positioning the product as a short-term holding zone for emergency funds, upcoming tax payments, or future large purchases. While higher-risk assets may deliver superior long-term returns, an MMA offers a balance of accessibility and yield that appeals to risk-averse investors, retirees prioritizing capital preservation, or anyone seeking a modest buffer against inflation without locking funds into a certificate of deposit.

Given the recent downward trend in broad deposit rates, the window for capturing a 4% APY may narrow in the coming months. Prospective account holders should compare current offers, review account terms, and weigh personal liquidity needs before funding an MMA.

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