Best Money Market Accounts in May 2025: Top Yields Hit 4.89% as Fed Holds Rates Steady

Money market accounts (MMAs) are offering some of the highest yields in years, with top institutions paying up to 4.89% APY as of May 5, 2025. This stands in stark contrast to the national average of just 0.53%, underscoring the importance of shopping around for the best rates. With the Federal Reserve holding interest rates steady at 4.25%–4.5% since January 2025, investors are bracing for potential cuts later this year if inflation continues to moderate. But for now, those willing to navigate minimum deposit requirements and fee structures can lock in substantial returns.

The top performers include:
- Quontic Bank: 4.75% APY with a $100 minimum deposit. Offers a debit card but limits transactions to six per month.
- Vio Bank: 4.46% APY, no monthly fee if enrolled in e-statements.
- UFB Direct (via Axos Bank): 4.01% APY with FDIC coverage up to $225 million for qualifying balances.

Key Considerations for Choosing an MMA

1. Fees vs. Yields: Many accounts impose monthly fees if minimum balances aren’t met. For example, CFG Community Bank requires a $1,000 balance to avoid a $10 fee, while First Internet Bank of Indiana demands a $4,000 average daily balance.
2. Transaction Limits: Federal Regulation D caps withdrawals at six per month for most MMAs, though accounts like Ally Bank (3.80% APY) offer check-writing and debit card access.
3. FDIC Coverage: Institutions like UFB Direct and EverBank (1.00%–4.00% tiered APY) provide expanded insurance, critical for high-balance savers.

Rate Outlook: The Fed’s Next Move Could Impact Yields

The Fed’s next policy meeting in June will determine whether rates stay steady or begin a gradual decline. Current MMA rates remain historically high, outpacing April’s 3.8% inflation rate, but delays in cuts could further compress yields. Institutions like EverBank, which ties its APYs to balance tiers, may become more attractive if rates decline, as their top tier (4% APY for balances over $100,000) could remain competitive.

Conclusion: Act Now to Lock in High Rates

In this landscape, the optimal MMA depends on individual priorities:
- Maximize yield with minimal hassle: Quontic Bank or Vio Bank offer top-tier rates with low entry barriers, provided you accept transaction limits.
- High-balance savers: UFB Direct’s $225 million FDIC coverage and 4.01% APY make it a standout for large deposits.
- No-risk approach: Ally Bank (3.80% APY) and Sallie Mae Bank (3.90% APY) provide check-writing access and fee-free structures.

With the Fed’s next move looming, now is the time to secure these rates. Historically, MMA yields have trended downward in post-Fed-cut environments, and the current 4.89% high-water mark could soon be a thing of the past. As the old adage goes: “A dollar saved at 4.89% is a dollar earned faster than inflation”—so act strategically before the window closes.