Money Market Account Calculator
↻ Updated 2026See how a money market account (MMA) grows over time with a starting balance and regular deposits, and how MMAs compare to high-yield savings accounts.
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How to read your money market projection
$49,355.98 after eight years, of which $10,355.98 is interest — 21% of the ending balance from money you never deposited. The split beneath the headline is the useful part: your $15,000 starting balance grows to $20,926.65 on its own, while the $24,000 of monthly deposits becomes $28,429.32. The lump sum earns more per dollar because it's been there the whole time.
How a money market account's balance compounds over time
The engine is a month-by-month loop, run 96 times on the defaults. Each month the balance earns one-twelfth of the nominal rate behind your APY, then your deposit is added on top. There's no closed-form shortcut and no cleverness — the compounding is the whole product.
The conversion to a nominal rate is the one step worth pausing on. An APY is what a year is worth once compounding has been applied, so it isn't the rate you feed into the compounding — divide 4.25% by 12 and run it twelve times and you get 4.334%, not 4.25%. So the tool works backwards first: the monthly rate that compounds to a 4.25% year comes from a 4.1694% nominal rate. Enter 4.25% and a year returns 4.25%, exactly as the bank's quote promises.
Deposits land after the month's interest is credited, so the $250 you add in month one earns nothing in month one, and the very last deposit earns nothing at all. That's the conservative convention and it costs a few dollars against an account that credits interest daily.
nominal rate = 12 × ((1 + APY) ^ (1 ÷ 12) − 1) ← back out the rate that compounds to the APY monthly rate = nominal rate ÷ 12 repeat for each of the (years × 12) months: balance = balance × (1 + monthly rate) balance = balance + monthly deposit total deposited = starting balance + monthly deposit × months interest earned = ending balance − total deposited
- APY
- The annual percentage yield you enter — converted to its equivalent nominal rate before compounding, so twelve months of growth returns exactly the APY you typed
- starting balance
- What's in the account on day one — compounds for every month of the term, which is why it out-earns larger sums added later
- monthly deposit
- What you add at the end of each month — each one compounds for less time than the one before it
- years
- How long the projection runs — multiplied by 12 to get the number of compounding steps
- balance
- The running total, carried month to month — the final value is your ending balance
Nothing in this arithmetic is specific to a money market account — it's the same loop that prices a high-yield savings account, because from a compounding standpoint the two products are the same product. What distinguishes an MMA is the access: check-writing and a debit card, features a savings account usually lacks, frequently paired with a higher minimum balance to open or to earn the headline rate.
That combination is what makes the category slippery. An MMA is a deposit account that behaves a bit like checking, and it shares a name with money market funds, which are securities and are not FDIC-insured at all. The FDIC's national money market rate was 0.61% as of June 15, 2026 against 0.38% for savings — a spread that says less about the products than about which institutions hold the deposits, since the average is weighted by each bank's share of deposits and most deposits sit with the largest banks.
Worked examples
Example: $15,000 to start, $250 a month, 4.25% for 8 years
The calculator's defaults, so you can follow along above. Eight years of month-end deposits at a constant 4.25%.
| Starting balancecompounds for all 96 months | $15,000.00 |
| Total deposited$15,000 + $250 × 96 | $39,000.00 |
| Balance after year 1$695.50 of interest so far | $18,695.50 |
| Balance after year 4$3,751.33 of interest — halfway in time | $30,751.33 |
| Ending balanceafter 96 compounding steps | $49,355.98 |
| Interest earned21.0% of the ending balance | $10,355.98 |
Halfway through the term you've earned $3,751.33 — 36% of the eight-year interest total. The other 64% arrives in the back half, on a balance that's twice the size. Interest is paid on what's accumulated, not on what you're adding, which is why the last years of any compounding projection carry it.
Example: which does the work — the lump sum or the deposits?
Split the defaults in two and run each half alone. Same 4.25%, same 8 years: first the $15,000 with no monthly deposits, then $250 a month starting from zero.
| $15,000 alone, no deposits$5,926.65 of interest on $15,000 | $20,926.65 |
| $250/mo alone, from zero$4,429.32 of interest on $24,000 deposited | $28,429.32 |
| Deposited in each casethe drip puts in 60% more money | $15,000 vs $24,000 |
| Interest in each caseand earns 25% less | $5,926.65 vs $4,429.32 |
| Both togetherthe defaults — $20,926.65 + $28,429.32 | $49,355.98 |
The $24,000 of deposits earns $4,429.32 while the $15,000 lump sum earns $5,926.65. Sixty percent more money, a quarter less interest — because the average dollar of the monthly drip has only been in the account for four years while every dollar of the lump sum has been there for eight. Time in the account, not dollars into it, is what compounding pays for. It's also why the two halves add up exactly: compounding is linear in the money, so you can price any deposit schedule by pricing its pieces separately.
Frequently asked questions
What is the difference between a money market account and a savings account?
Access, mostly. Both are insured deposit accounts that pay interest and compound identically — this page's arithmetic and the high-yield savings page's arithmetic are the same loop. The MMA typically adds check-writing and a debit card, which a savings account usually doesn't have, and often asks for a higher minimum balance to open or to earn the top rate.
The yields sit close enough that the account features usually decide it rather than the rate. The FDIC's national averages as of June 15, 2026 had money market accounts at 0.61% and savings at 0.38%, but both figures are deposit-weighted averages dragged down by the largest banks, and accounts actively competing for deposits pay multiples of either. Run identical inputs through the high-yield savings calculator — the ending balances differ only if the APYs do.
Is a money market account FDIC insured?
A money market account at an insured bank is, to $250,000 per depositor, per institution, per ownership category — the same coverage as any checking or savings account. At a credit union the equivalent NCUA share insurance applies on the same terms.
A money market fund is not, and the near-identical name is the single most consequential confusion in personal-deposit banking. Funds are securities, sold through brokerages, holding short-term debt like Treasury bills and commercial paper. They're conventionally described as low-risk and they are — but low-risk and federally insured are different claims, and a fund's share price can in principle fall below its target. If you're not sure which you hold, the tell is where you opened it: banks and credit unions sell accounts, brokerages sell funds.
Can you lose money in a money market account?
Not your principal, within the insurance limits — that's what the FDIC or NCUA coverage buys, and it holds even if the bank fails. What can shrink the balance is smaller and duller: monthly maintenance fees when you drop below the minimum, and excess-transaction fees if the account limits withdrawals. An account paying 4.25% on a small balance can lose to its own fees.
The larger erosion is one no insurance covers. Interest is taxed as ordinary income the year it's credited, and inflation takes its share of what's left. On the defaults, $49,355.98 after eight years buys roughly what $38,962 buys today at 3% inflation — slightly less than the $39,000 deposited. The balance never fell; the purchasing power did, by about $38. That's the real risk of a deposit account, and it's the mirror image of the risk you took it out to avoid.
What is the difference between a money market account and a money market fund?
One is a bank deposit, the other is an investment, and everything else follows. The account is opened at a bank or credit union, is FDIC- or NCUA-insured to $250,000, and pays a rate the bank sets. The fund is bought through a brokerage, holds short-term debt securities, has no federal insurance, and pays whatever its holdings yield after the manager's expenses.
A fund's yield often tracks short-term rates more responsively, since a bank chooses when to reprice while a fund simply reflects what its holdings earn — though neither wins categorically, and which is ahead varies with the rate cycle. Liquidity differs too: an MMA's debit card spends today, while selling out of a fund and moving the cash to a bank takes a business day or more. This calculator prices the account; a fund's return isn't a fixed APY and can't be modelled by this loop.
Do you pay taxes on money market account interest?
Yes, at your ordinary income rate, in the year the interest is credited — IRS Topic 403 treats interest you can withdraw without penalty as taxable when it becomes available to you. There's no deferral and no preferential rate: unlike a long-held stock, there's no such thing as an unrealised gain in a deposit account.
Your bank issues Form 1099-INT once you've earned $10 or more of interest in a year, but that's a threshold for the bank's reporting duty, not an exemption from yours — Topic 403 requires all taxable interest to be reported whether or not the form arrives. Everything on this page is pre-tax. On the defaults, $10,355.98 of interest at a 22% marginal rate keeps about $8,077.66, which drops the effective ending balance to roughly $47,078.
Where this money market projection diverges from a real account
A monthly compounding loop at a flat rate. The gaps between that and an actual MMA are mostly features the loop has no way to see.
- Interest is credited monthly, not daily — The loop takes twelve steps a year and your deposit lands after the month's interest is credited, so the $250 you add in month one earns nothing that month and the final deposit earns nothing at all. A real MMA crediting interest daily on a rising balance finishes a few dollars ahead. The convention errs against the projection rather than for it. It doesn't distort the yield itself: the APY you enter is converted to its equivalent nominal rate first, so a year returns exactly the rate you typed however the year is divided up.
- No fees, minimums or transaction limits — The model assumes every dollar earns the headline rate from month one. Real MMAs frequently require a minimum balance to open or to earn the advertised APY, tier the rate by balance, charge maintenance fees below a threshold, and cap the transactions the debit card and cheques were the reason you opened it for.
- Tax is absent — Every figure is pre-tax, and interest is ordinary income in the year it's credited. A 22% marginal rate turns the defaults' $10,355.98 into about $8,077.66 kept — and the tax is due each year whether or not you withdraw anything.
- The rate never moves — One APY held flat for up to 40 years, against a product whose rate the bank can change any day. MMA rates follow the federal funds rate, so anything past a year or two is a projection about an assumption rather than about an account.
- Inflation isn't subtracted — The ending balance is in future dollars. At 3% inflation, $49,355.98 in eight years has roughly the purchasing power of $38,962 today, against $39,000 deposited — a real loss of about $38 on eight years and $39,000. The chart climbs; the purchasing power doesn't. The nominal figure and the real outcome tell opposite stories, and at a 4.25% yield against 3% inflation the account is close to treading water before tax has taken anything.
- ·Standard compound-interest / APY formulas
- ·FDIC / NCUA deposit insurance — Insured up to $250,000 per depositor, per institution
Rates, brackets and limits here are checked against primary sources. If a number still looks off, email support@realmoneyiq.com and we'll review and fix it.
RealMoneyIQ provides free educational calculators, not financial, tax, investment or legal advice. Results are estimates based on the assumptions you enter and publicly published rates; your actual outcome will differ. Always confirm decisions with a licensed professional who knows your full situation.