Here are the best money market accounts of July 2023

Editor's Note: APYs listed in this article are up-to-date as of the time of publication. They may fluctuate (up or down) as the Fed rate changes. CNBC Select will update as changes are made public.

Money market accounts — typically seen written as MMAs — are a type of savings account that financial institutions offer consumers. Account holders make a minimum deposit and see their savings earn interest, growing over time.

What makes MMAs stand out from other savings vehicles like brick-and-mortar savings accounts, high-yield accounts and CDs, however, is their checking account features.

Many of the best MMAs offer savers perks they would normally find in a checking account, such as check-writing privileges, debit cards and ATM access with out-of-network fee reimbursements.

To determine which MMAs are the best overall, CNBC Select analyzed and compared dozens of accounts offered by online and brick-and-mortar banks, including large credit unions. To rank the top five, we favored those accounts that had the benefits of a checking account as well as higher-than-average APYs. We also took into account minimum deposits, additional fees and ease of use.

The national average APY on MMAs is currently 0.44% for deposits under $100,000, according to the Federal Deposit Insurance Corporation (FDIC). The accounts we selected for this ranking all offer a rate that is more than seven times the national average. They are all FDIC-insured, have zero monthly maintenance fees and all but one require no minimum deposits to open an account.

Below, we review the top five MMAs that all offer check-writing abilities, plus most have debit cards and/or offer ATM access to your cash. (See our methodology for more information on how we choose the best money market accounts.)

• Best overall money market account: Ally Bank Money Market Account
• Runner-up: Synchrony Bank Money Market Account
• Best for free checks when you open an account: Sallie Mae Money Market Account
• Best for ATM access: NBKC Bank Personal Money Market
• Best for larger deposits: Axos Bank High Yield Money Market Account

• How does a money market account work?
• What is the difference between a money market account and other banking products?
• Can you lose your money in a money market account?
• What are the disadvantages of a money market account?
• Should I put my money in a money market account?
• Why is my money market interest rate so low?

A money market account (MMA) combines the features of both a checking and savings account.

MMA savers can withdraw or spend the cash in their account like they would if it were a checking account, including writing checks, swiping their debit card, using their ATM card or making an electronic transfer.

You earn interest at a higher rate with a MMA than with an interest-bearing checking account, but you are subject to the same federal withdrawal and transfer limit that savings accounts have: six per statement cycle (not counting ATM withdrawals). This means that MMA savers are limited to the number of checks that they can write from their account each month. (Note that this federal law, known as Regulation D, has been temporarily lifted during the coronavirus outbreak.)

While the annual percentage yield (APY) you earn with a MMA is higher than what you would likely earn with a checking account, traditional savings account or even a short-term CD, MMA rates tend to be around the same as what high-yield savings accounts offer these days. The minimum deposit and balance requirements are often higher with MMAs than with high-yield savings, but if you have a large chuck of cash you can rest assured this is also a safe place to put it.

To earn the highest APY, your best bet is to put money into a long-term CD. MMAs offer more flexibility and access to your funds than CDs, which come with term lengths and penalties for withdrawing your cash before your maturity date.

You won't lose your money in a MMA.

Most MMAs, like those included on this list, are covered by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per person. If you are opening a joint MMA with a spouse, the insurance limit is doubled.

This means that if your bank were to suddenly collapse and go bankrupt, your money is covered up to this $250,000 limit and will be refunded to you. When shopping around for the best MMA, check that the bank is FDIC-insured. Be sure not to confuse money market accounts with money market funds, which are investment products that are not insured.

Keep in mind that while you won't lose the money in your MMA, any withdrawals that you make will lower your principal balance/earnings.

MMAs are great savings vehicles for earning a higher-than-average interest rate while also having the ability to access your cash directly without needing to transfer it from your savings to your checking account.

There are some downsides to having a MMA, however, when you compare it to its sibling savings products. Here are three disadvantages that stand out:

1. MMAs may offer checking account features, but they are subject to the withdrawal and transfer limit of six per statement cycle.
2. MMAs may pay higher interest rates than traditional savings accounts, but they often require larger minimum deposits to open an account and higher balances to earn interest and/or have your monthly fee waived.
3. MMAs provide more access to your money than a CD does, but their APYs are not as high as the longer-term CDs.

MMAs can be useful depending on what you plan to do with the money you put into one.

As an alternative to a high-yield savings account, MMAs are a good option for earning interest to reach a certain savings goal.

While you use your checking account for everyday purchases, MMAs could be useful to fund a larger expense once a month, like a mortgage. You wouldn't have to worry about transferring the funds to a checking account if they were stored in a typical savings account and you stick to the MMA withdrawal limit. Plus, the money sitting in your MMA collects more interest than it would in a checking account.

Since many MMAs allow customers to access their funds via a debit card, check or ATM (up to the federal withdrawal limit), these accounts may not be the best option for building an emergency fund. The money is almost too easy to tap into and you could end up spending more than saving. If you can resist the urge to unnecessarily spend what's in your MMA, however, these are good products if you have more of an immediate need for cash.

MMAs have variable interest rates, which means they can fluctuate. Similar to when you sign up for a typical checking, savings or high-yield account, you have the risk of your rate dropping after you open a MMA.

APYs typically go up when the economy is doing well and the Federal Reserve raises interest rates and likewise drop when the economy weakens and the Fed lowers interest rates. Amid the economic fallout from the coronavirus pandemic, this year we have seen the latter take place.

When shopping around, just remember that the rates and fee structures that banks advertise for their MMAs are not guaranteed forever. They are subject to change without notice, and they will often fluctuate in accordance with the Fed rate.

To determine which money market accounts (MMAs) offer the best return on your money, Select analyzed dozens of MMAs offered by online and brick-and-mortar banks, including large credit unions.

We found that the APY offered by online banks and credit unions far outpaced those offered by most national brick-and-mortar banks. While many credit unions have good MMA options, they didn't make our final list because the majority require membership, which can require you to jump through several hoops to qualify. This is a ranking of only MMAs, excluding any money market funds (which are investment products).

We narrowed down our ranking by only considering those accounts that offer competitive APYs, or higher-than-average rates, as well as no (or low) required minimum deposits to open an account and zero monthly maintenance fees.

While the accounts we chose in this article consistently rank as having some of the highest APY rates, we also compared each MMA on a range of other features, including check-writing abilities, debit card and ATM access, website and mobile features, as well as factors such as insurance policies and customer reviews when available. We also considered users' deposit options and the frequency with which the interest compounds.

All of the MMAs included on this list are FDIC-insured up to $250,000 per person. If you are opening a joint account MMA, the insurance limit is doubled.

The rates and fee structures banks advertise for their MMAs are not guaranteed forever. They are subject to change without notice and they often fluctuate in accordance with the Fed rate. If you open an MMA, the APY you earn is a variable rate — meaning it can go up and down at any time.

Your earnings depend on the amount you deposit into your MMA, your APY, any additional contributions and associated fees, as well as withdrawals that you make from your account. Generally, larger deposits and a higher interest rate will earn you the most money. Any withdrawals will lower your principal balance/earnings.

To open an MMA for the first time, most banks and institutions require a deposit of new money, meaning you can't transfer money you already had in an account at that bank.

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