Interest rate forecast
Money market accounts have never been a great place to earn big yields, but lately returns for savers have been, on average, laughable.
That's not going to change in 2013, as MMA rates will follow CD rates downward, says Dan Geller, executive vice president for Market Rates Insight, a banking industry research firm based in San Anselmo, Calif.
But that won't stop people from shifting funds from CDs to money market accounts, he says. That's because while returns are likely to be unspectacular, at least they're liquid. These days, the gap between CD returns and returns on money market accounts is so small that many Americans are opting for the flexibility of money market accounts rather than locking up their money for years in a CD.
"If all I'm getting is a meager marginal interest rate versus savings or a money market, I may as well keep it liquid, and this way it's available to me at any time," Geller says. "I'm not giving up much."
Rate movement in 2012
MMA rates averaged 0.11 percent in 2012. They declined from 0.13 percent at the beginning of the year to 0.11 by the end. This year, rates will likely go lower still even as billions of Americans' savings roll in to the accounts.
What's a consumer to do?
For consumers on the lookout for better yields, there are still some to be had. But, you may have to look beyond your own bank to get them.
"On different relationship and special savings accounts, one can still get, relatively speaking, a good return," Geller says.
As of this writing, there were still several banks offering returns around 1 percent on money market accounts in Bankrate's MMA database.