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Methodology For Ranking Savings, Money Markets, And CDs

Methodology For Ranking Savings, Money Markets, And CDs

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Certificates of deposit are originally classified similarly to savings and MMA accounts, with the CD offering the highest APY at the top. The maturity term, or duration, of the certificate, is the first tiebreaker between any two identical rates.

We make it simple to locate the best savings rates by providing daily rankings of the best rates for savings accounts, money market accounts (MMAs), and certificates of deposit. And because we display the best-paying accounts based solely on APY, rather than which financial institutions advertise with us, you can be confident you’re viewing a list of the very finest possibilities available.

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Since 2019, we have been researching and presenting the best rates on CDs, savings accounts, and MMAs. We carefully review the financial institutions and accounts on our listings, and they must meet certain requirements to qualify. This tutorial outlines these factors and how our rating mechanism works.

How We Find the Best Rates

Our list of nationally available banks and credit unions comprises over 200 physical and online institutions. About 200 of these offer CDs that fit our requirements, 100 high-yield savings accounts, and 60 money market accounts.

Every business day, our staff monitors the deposit rates at these institutions using a combination of automatic and human techniques to ensure we find every great rate and update any outdated rates. We also regularly add institutions when they increase their availability or we hear about new national players.

Most institutions update their rates online in the morning across numerous time zones, and we collect additional rate data throughout the day. We update our listings every business day, and the “updated” date on the page indicates if the page has been updated for the day.

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Eligibility for Inclusion

* Institutions That Qualify

To be considered for inclusion in our deposit account rankings, financial institutions must meet two requirements. They must be:

  • Federally insured
  • Available nationwide

1. Federally Insured

For banks, this means they are FDIC members, whereas credit unions are NCUA members. This provides that the US government will protect every customer’s deposits of up to $250,000 (per person, per institution, and ownership category—e.g., single or joint account) if the institution fails or is seized. Our rankings exclusively include FDIC and NCUA members, so you can be confident that funds (up to $250,000) deposited with these banks will be safe.

Along these lines, both physical and internet banks are eligible for inclusion. If an internet bank has FDIC insurance, savings are just as safe there as in any other FDIC institution, regardless of whether the bank has any physical branches.

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2. Available Nationwide

To best serve our readers nationwide, we only list banks and credit unions that accept customers from all over the country. This generally indicates that online account opening is possible, and residency in any US state is permitted.

We make a few exceptions for banks that service the majority but not all of the country; to be deemed a nationwide bank, it must serve customers from at least 40 states. The vast majority of the banks in our rankings do serve all 50 states, but when this is not the case, we mark the exclusions with an asterisk.

Credit unions work a little differently since they require membership. Eligibility to join, known as the “field of membership,” is sometimes determined by living in a specific geographic location or working for a particular organization.

Many credit unions, however, welcome customers from all over the country and offer a special pathway for people who do not otherwise fit the standards. Sometimes this is free, but other times it costs a one-time payment or membership fee to the credit union’s charitable affiliation. In all of our articles on the finest CDs, savings accounts, and money market accounts, we explain what it takes to become a member of the credit unions we include while omitting any that need a $40 donation or more.

Savings Accounts and Money Market Accounts That Qualify

Our evaluations of high-yield savings and money market accounts include those with a minimum balance of $25,000 to receive the highest rate. Also, we disqualify those who limit their high-yield rate to only low balances, which we define as less than $5,000. In other words, a savings account that claims a high APY but only applies to the first $1,000 of your balance would not be eligible for our rankings.

In addition, we differentiate between savings and money market accounts based on check-writing privileges. Historically, money market accounts allowed check writing whereas savings accounts did not, and we adhere to that conventional definition in our methodology.

However, “money market” has evolved into a marketing word, with some banks using it in the name of their savings account even if it does not contain check writing. For our purposes, an account that does not allow check writing is suitable for our savings account rankings. If it accepts checks, it can be included in our money market account rankings.

Finally, any savings or money market account that is accessible only through a mobile app must be available on both the iOS and Android platforms.

Certificates of Deposit That Qualify

Certificates of deposit can be included in our normal CD rankings if they demand a minimum initial investment of $25,000 or less. Those with a necessary deposit of $50,000 to $100,000 are eligible for our jumbo CD rankings. Though certain CDs exist in the market for amounts of at least $250,000, the options are limited, and we do not track or rate these so-called “super jumbo” certificates.

To be eligible for our rankings, CDs must also have a set rate that is known for the term. For this reason, indexed certificates, sometimes known as “flex CDs” or “variable-rate CDs,” do not qualify since their rates fluctuate in response to an unpredictable indicator, such as the prime rate or federal funds rate.

One exception is “bump-up” certificates, which allow you to increase your rate during the term, typically just once and at your initiation. We allow these certificates in our CD rankings because you are still guaranteed the original rate if you want it for the entire term, and activating the raised rate option will only boost your return.

How We Create Our Rankings

Ranking Order for Savings and Money Market Accounts

We rank all of the nationwide high-yield savings or money market accounts that qualify for our listings by interest rate, with the highest APY at the top. When two accounts pay the same rate, we use the continuing balance to calculate the APY. So, for example, an account with a $500 continuous balance would rank higher than one with a $10,000 minimum balance. If there is still a tie after considering the minimum ongoing balance, we rank according to the lowest necessary initial deposit. Following that, ties are settled alphabetically.

Ranking Order for Certificates of Deposit

Certificates of deposit are originally classified similarly to savings and MMA accounts, with the CD offering the highest APY at the top. The maturity term, or duration, of the certificate, is the first tiebreaker between any two identical rates. Those with shorter durations are ranked higher than those with longer periods. This is significant since not every CD has a regular term of 3, 6, 12, etc. months, and there are many odd-term certificates available in the market. We thus categorize CDs into term ranges, such as 5-9 months for the 6-month CD rating, 10-14 months for the 1-year CD ranking, and so on.

When two CDs are equal in APY and term, the third sorting criterion is the minimum necessary deposit, with those requiring a lower deposit ranking higher than those requiring a greater cash commitment. If the CDs remain tied after the third sort, they are listed alphabetically.

Choosing the Right Account for You

When determining where to keep your money, shopping around can make a big difference. Choosing a top rate over an average rate can save you hundreds or even thousands of dollars over time.

Our rankings seek to make choosing a savings, money market, or CD account as simple as possible by condensing rate data from thousands of deposit accounts and presenting you with the best-paying options. However, the account you select is still a personal choice. You may already have a relationship with an institution that offers the seventh-best rate rather than the greatest, making it much more convenient.

Alternatively, you may want to avoid a specific institution due to a terrible experience, or you may choose to use a bank rather than a credit union. Account elements such as minimum deposit, CD length, and so on can help you choose the best product for you.

That’s why our rankings often offer 15 or more options for each product category, allowing you to select the best one for your needs while knowing that any one of them is among the highest-paying accounts in the nation.

MMAs Are Insured Deposits

The Federal Deposit Insurance Corporation (FDIC), an independent federal government agency, insures MMA deposits and earnings in banks. The FDIC insures certain types of accounts, such as MMAs, up to $250,000 per depositor per bank. This means that if you have other insurable accounts at the same bank (checking, savings, or certificate of deposit), they will all count toward the $250,000 insurance maximum. Joint accounts are insured up to $500,000.

The National Credit Union Administration (NCUA) offers equivalent insurance coverage for money market accounts opened at credit unions ($250,000 per member per credit union). If you wish to insure more than $250,000, the best method to do so is to open an MMA with multiple banks or credit unions.

Money market mutual funds, on the other hand, are not government-insured—even if you withdraw them from a bank.

Features of Money Market, Other Types of Accounts for Saving
  MMA   Savings  Checking   CD   MF
  Interest Type   Variable  Variable   Variable  Fixed   Variable
  FDIC-Insured   Yes   Yes   Yes   Yes   No
  Checks Number of checks may have monthly limit   No  Unlimited   No Unlimited number but may require check have minimum dollar amount
  Debit Card   Yes   No   Yes   No   Yes
  Transactions/Month Check with your bank check k with your bank

Meet the Banking Reviews Team

1. Sabrina Karl has more than 20 years of expertise writing about savings, CDs, and other banking subjects. She is currently a staff writer at Investopedia and one of the country’s leading experts on how to maximize the return on your bank deposits. She has previously written for Bankrate, CreditCards.com, DepositAccounts.com, and RateSeeker.

2. Yasmin Ghahremani is an Associate Editorial Director at Investopedia, where she handles educational content on consumer financial products such as checking accounts and life insurance. She joined the team in January 2023, following nearly four years in a similar position at The Balance. She has almost a decade of experience teaching people about personal finance, including positions as managing editor at CreditCards.com and Wise Bread, and contract editor at LendingTree.

Yasmin also has vast international experience covering business, technology, and the environment for broadcast and print publications such as CNN, CNBC, and Asiaweek magazine. She holds a Master of International Affairs degree from Columbia University.

3. Hilarey Gould has more than a decade of journalism experience, specializing in editing, content development, SEO, social media, and more. She is currently the Editorial Director for Financial Products and Services at Investopedia and has previously worked as an editor at The Balance, Bankrate, SmartAsset, and realtor.com. Hilary holds a master’s degree in journalism from the University of Missouri.

What are the differences between savings money market accounts and CDs?

With a savings account and a money market account, you can withdraw funds once a month up to the bank’s set maximum. CDs demand that you leave the money in the account until it matures. After that, you can withdraw your initial deposit and the interest received, or roll the entire amount into a new CD.

What are the three types of savings methods?

  • Regular savings accounts earn interest and provide easy access to funds.
  • Money market accounts generate interest and may have check-writing capabilities and ATM access.
  • Certificates of deposit, or CDs, often have the greatest interest rates among savings accounts, but no access to cash.

What is a CD in the money market?

A Certificate of Deposit (CD) is a type of money market instrument that is issued in dematerialized form in exchange for funds placed in a bank for a certain period of time. The Reserve Bank of India (RBI) periodically provides rules regarding Certificates of Deposit.

How are money market rates determined?

Money market investors are compensated for lending funds to organizations that need to meet their short-term debt obligations. This compensation is often in the form of variable interest rates based on the prevailing interest rate in the economy.

Which is better savings or money market?

A money market account is a type of savings account that typically pays a greater interest rate and provides easier access to your funds than a traditional savings account. That means you can receive checks or a debit card to spend the money in your account—though you may be limited on how frequently you can make a withdrawal.

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