Money Market Account Calculator United States

A money market account pays more than a checking account and gives more access than a savings account, which makes it a good place for an emergency fund, a tax reserve or the cash part of a portfolio that you want insured and available. This calculator grows a starting deposit and optional monthly additions at the APY you enter, compounding monthly, and splits the ending balance into contributions and interest.

What this calculator projects

Enter the opening deposit, an optional monthly addition, the annual percentage yield and the number of years. The tool converts the APY to a monthly rate and moves the balance forward one month at a time, adding growth and then any deposit.

The opening deposit compounds for the full term, while each later addition compounds only from the month it goes in, so early money does more of the work. The monthly deposit defaults to zero, since many people open these accounts with a lump sum and leave it.

A money market account is not a money market fund

The two names are almost the same, but the products are very different.

A money market account, or MMA, is a deposit at a bank or credit union. It carries FDIC coverage up to $250,000 per depositor, per insured bank, per ownership category, or the equivalent NCUA coverage at a credit union. The bank sets the rate as it chooses.

A money market fund is a mutual fund regulated by the SEC that holds short-term instruments such as Treasury bills, commercial paper and repurchase agreements. It is not a deposit and is not insured. Its yield follows what those holdings earn, so it moves with short-term market rates, and under stress a fund's share price can fall below a dollar.

A fund usually reacts faster to rate changes, up and down; an account is insured and simpler. Enter the rate for the product you actually hold, because a fund's yield in a calculator built for an insured deposit, or the assumption that a deposit will track market rates, leads to the wrong plan.

Tiers, minimums and the rate you actually get

Banks use money market accounts to attract larger balances, so the advertised APY often applies only above a threshold, with lower tiers paying noticeably less. Some accounts do the reverse and pay a much lower rate on balances above a cap.

Many accounts require a minimum opening deposit, and even more require a minimum ongoing balance to avoid a monthly fee. A fee of a few dollars a month can take a large share of the interest on a modest balance.

The calculator does not model tiers or fees. Enter the APY that applies to the balance you will actually keep, not the advertised headline rate.

The access that defines the product

Compared with a plain savings account, a money market account adds transactional access. Most come with a limited number of checks and often a debit or ATM card, so you can pay directly from the account. That is useful for a tax reserve or a self-employed person's expense buffer.

In 2020 the Federal Reserve removed the six-per-month transfer limit that used to apply to these accounts. Banks may still set their own limit, and many do, so check your account agreement.

How the balance builds

The split between interest and deposits shows where growth comes from. Over a short period, or with regular additions, your own money makes up most of the balance. Over a longer period the interest share rises, because each month's interest is added to the balance that earns the next month's interest.

You control the additions; the bank controls the rate. An automatic monthly transfer is the more dependable way to grow the balance.

A three-year example

Open with $25,000, add nothing, and assume a 4 percent APY. After three years the calculator shows about $28,180, so the account has earned about $3,180 in interest with no market risk.

Add $200 a month and both your contributions and the interest on them rise. Over five or ten years the interest portion grows faster still.

If the 4 percent applies only above $25,000 and you draw the balance down to $20,000, the rate on the whole balance may be much lower than the projection assumes.

Choosing between an MMA, a savings account and a fund

For an emergency fund you may need quickly, a money market account and a high-yield savings account are close substitutes. Choose whichever pays more on your actual balance, and prefer the MMA if you will use the checks or card.

For a large cash holding where every basis point counts and you can wait a day or so for settlement, a money market fund often yields more and adjusts faster. Income from Treasury securities is generally exempt from state and local income tax, so a fund holding only Treasuries can be worth noticeably more after tax in a high-tax state.

For money you will not need before a known date, a certificate of deposit locks in the rate so the bank cannot cut it.

Assumptions and limits

This is a planning estimate, not a guarantee. It compounds monthly at a constant APY, assumes every deposit is made on schedule and shows the balance before the ordinary income tax due on the interest. It does not model tiered or promotional rates, balance caps, minimum-balance rules, monthly fees or withdrawals. Check the tiers and fees of any account before opening it, and rerun the projection whenever your rate changes.

About This Money Market Account Calculator

Use this money market account calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.