Project the balance of a money market account with tiered or flat APY

What a money market account is

A money market account (MMA) is a savings product that typically offers a higher rate than a standard savings account in exchange for higher minimum balance requirements or tiered-rate structures. MMAs usually come with check-writing privileges and debit-card access — features that distinguish them from both savings accounts (no checks) and CDs (no access at all during the term). They are FDIC-insured at US banks and operate under similar protections at regulated institutions in other jurisdictions.

How the math works

Final balance = Opening × (1 + APY/n)^(n × years) + Monthly × [((1 + APY/n)^(n × years) − 1) / (APY/n)] × (n/12). The first term is compound growth on the initial balance; the second is the future value of recurring monthly deposits treated as an ordinary annuity. Interest earned is the final balance minus everything deposited (opening plus sum of monthly contributions).

MMA vs high-yield savings

The line between MMAs and high-yield savings accounts has blurred significantly. Some online banks that call their product a money market account offer the same rate and features as their high-yield savings account. Some traditional banks distinguish the two with different minimums and tiered rates. The practical difference is usually minimum balance requirements — many MMAs require $5,000 to $25,000 to earn the advertised rate; HYSAs typically have no minimum. Before opening, confirm the rate applies to your expected balance.

Tiered rates and rate compression

Many MMAs pay different rates at different balance tiers — for example, 4% on balances under $25k, 4.5% on balances $25k-$100k, and 5% above $100k. For balances close to a tier boundary, the effective rate on the full balance is a weighted average. The calculator uses a flat APY for simplicity; for tiered structures, use the effective blended rate for your expected balance. Some banks advertise the top-tier rate prominently while most customer balances earn lower tiers — always read the rate table, not just the headline.

MMA for business and personal use

For personal cash, MMAs are typically appropriate for emergency funds, short-term savings, and cash reserves for upcoming large purchases. The higher rate matters meaningfully on larger balances; on smaller balances the advantage over a high-yield savings account can be minimal. For business cash management, MMAs often offer features like higher transaction limits and sub-account structures that regular savings does not. Small businesses with $50k+ in operating cash reserves commonly find MMAs a better fit than standard business savings.

Variable rate risk

Unlike CDs, MMA rates are variable — the bank can change them at any time, typically with short notice. In a rising-rate environment this works in your favour (your rate increases automatically). In a falling-rate environment your rate drops. The calculator projects at the current rate; actual outcomes will differ as rates move. For rate-sensitive planning, consider a CD ladder or a mix of MMA plus CDs to blend flexibility with rate lock.