Money Market Accounts Calculator
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Reviewed by Calculator Editorial Team
Money market accounts (MMAs) are short-term savings accounts that offer higher interest rates than traditional savings accounts. This calculator helps you estimate potential returns, compare different accounts, and understand key financial concepts like APR and APY.
How to Use This Calculator
Enter your initial deposit amount, annual percentage rate (APR), and the number of years you plan to keep your money in the money market account. The calculator will show you the future value of your investment, the total interest earned, and a growth chart.
For example, if you deposit $1,000 at a 2.5% APR for 5 years, the calculator will estimate your account balance and interest earned. Remember that actual results may vary based on market conditions and account terms.
Key Formulas
Future Value Calculation
Future Value = Initial Deposit × (1 + APR)ⁿ
Where n is the number of years
Total Interest Earned
Total Interest = Future Value - Initial Deposit
This calculator uses simple interest compounded annually. For more complex scenarios, consult a financial advisor.
APR vs APY
Annual Percentage Rate (APR) is the simple annual interest rate, while Annual Percentage Yield (APY) accounts for compounding. APY is always higher than APR for the same account.
Example
An account with a 2.5% APR and quarterly compounding has an APY of approximately 2.56%.
Fees and Risks
Money market accounts typically have low fees, but some institutions charge monthly maintenance fees for balances below a certain threshold. Additionally, money market accounts are FDIC-insured up to $250,000 per depositor.
While generally low-risk, money market accounts are not completely risk-free. Interest rates can fluctuate, and some accounts may have withdrawal restrictions.
Comparison Table
| Account Type | Typical APR | Minimum Balance | Withdrawal Limits |
|---|---|---|---|
| High-Yield Savings Account | 1.00% - 3.00% | $0 - $250 | 6 per month |
| Money Market Account | 1.50% - 4.50% | $1,000 - $5,000 | Unlimited |
| Certificate of Deposit (CD) | 2.00% - 5.00% | $1,000+ | Penalty for early withdrawal |
Frequently Asked Questions
What is the difference between a money market account and a savings account?
Money market accounts typically offer higher interest rates and more frequent compounding, but they may have higher minimum balance requirements and more limited withdrawal options.
Are money market accounts FDIC-insured?
Yes, money market accounts are FDIC-insured up to $250,000 per depositor, just like traditional savings accounts.
How often are money market accounts compounded?
Money market accounts are typically compounded daily, weekly, or monthly, depending on the institution.