It looks like the Federal Reserve won't be raising interest rates anytime soon, so a relatively high-paying money market account could be a solid choice if you want to park your cash for the longer haul.
BBVA Compass is offering an MMA paying 1.10% APY, and is guaranteeing the rate for the 12 months after you open your account
The bank no longer restricts account holders to residents of the states where the Birmingham, Alabama-based bank has a brick-and-mortar presence. You can live anywhere in the country and open a BBVA Compass ClearChoice Money Market, but the account must be opened online.
And you must have at least $10,000 in the account to earn the bank's highest rate, of 1.10% APY. With that much in your account, you also won't have to pay any monthly service fees.
CDs pay more, have restrictions
If you don't have a spare $10,000 to leave in your account, you should look elsewhere for an MMA. Lower balances earn just 0.05% APY from BBVA Compass, and you'll have to pay a $15 monthly service fee.
On the upside, the bank pays its top rate on balances up to $4,999,999.
While the ClearChoice Money Market won't earn you as much as the best 12-month CDs, which are currently paying around 1.25% APY, you typically face a penalty if you pull money out of a CD early.
You don't have to worry about that if you decide to close your MMA at any point.
That gives you the flexibility to move your money if the Fed starts to boost rates. Some speculated rates would rise in June, but a poor May jobs report, which showed just 38,000 jobs created that month, put the kibosh on that idea. Some economists think rates may rise in September.
Other options for your cash
BBVA Compass's MMA pays nearly as much as EverBank's Yield Pledge MMA, and both offer a 1-year guarantee.
EverBank, based in Jacksonville, Florida, is paying 1.11% APY for the first year after you open a new account. That's just a fraction more than you'll earn from BBVA Compass if you keep your money in the MMA for a year.
EverBank pays its top rate on its Yield Pledge MMA on balances to $150,000. Larger balances earn 0.61% APY. You need to deposit at least $1,500 to open an account, but you don't need to keep a certain amount in your account to earn interest, and there are no monthly fees.
Whenever you're considering opening an MMA, you need to remember that banks and credit unions can raise or lower rates any time they choose, unless the rate is locked in for a certain length of time.
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