Money Market Calculator

1. Enter your starting deposit and the monthly contribution you plan to add.
2. Enter the APY the bank or fund quotes and the number of years. For a fund, add an extra yearly fee only when the quoted yield is not already after expenses.
3. Read the ending balance, the verdict and the year-by-year table. Change one input at a time to see what drives the result.

A money market account is a bank deposit account, and a money market fund is a type of mutual fund. The names sound alike, but the products are regulated and protected in different ways.

The FDIC lists money market deposit accounts among the deposit products it insures, up to $250,000 per depositor, per ownership category, per insured bank. A money market fund invests in liquid, short-term debt, cash and cash equivalents. The SEC notes that money in a fund is not guaranteed by the FDIC, so you can lose money.

Both products hold cash you may need soon, such as an emergency fund or savings for a purchase within a few years. Neither one is built for long-term growth. The SEC notes that money market fund returns have historically been lower than those of other mutual funds. This calculator models both products with one rule: a steady yearly yield that compounds monthly.

Money market interest compounds, which means each period earns interest on the balance plus the interest already added. The calculator converts the APY into the monthly rate that compounds back to that APY over 12 months.

1. Subtract any extra yearly fee from the APY to get the net yearly yield.
2. Convert the net yield to a monthly rate. At a 4.5% APY, r = 1.045^(1/12) - 1 = 0.3675% a month.
3. Grow the balance by r each month, then add the monthly contribution at month end.
4. Subtract total contributed from the final balance to get interest earned.

This works because APY already includes compounding. Federal Regulation DD says APY assumes principal and interest stay on deposit for the whole term. A deposit with no contributions therefore grows by exactly the APY in one year, whether the bank compounds daily or monthly.

You open an account with $10,000, add $200 a month, and earn a 4.5% APY for 5 years. The rate is an example, not a current quote.

Calculation: the monthly rate is 0.3675%. The first month earns $36.75 on the deposit before the first $200 goes in. After 60 months you have contributed $22,000.00.

Meaning: the ending balance is $25,860.17, of which $3,860.17 is interest. That interest equals about 17.5% of what you put in. Interest grows faster each year because it earns interest of its own.

The rate, the time and the amount you add move your balance the most. Fees, timing and outside forces change it less.

The Yield and How It Changes

Money market rates are usually variable. The SEC notes that fund yields change over time and generally reflect short-term interest rates. The Federal Reserve steers the key short-term rate, the federal funds rate, toward the target set by its FOMC. In the example, a 4.0% APY instead of 4.5% leaves $457.84 less after 5 years.

Time

Compounding builds on itself. The same plan run for 10 years instead of 5 ends near $45,624.83, with $11,624.83 of interest, about three times the 5-year interest.

Fees

A fund fee lowers the net yield directly. A 0.5% yearly fee on a 4.5% yield gives the same result as a 4.0% yield. The SEC warns that when rates are very low, fund fees can exceed fund income.

Deposit Timing

The tool adds contributions at month end. Adding them at the start of each month would earn $49.24 more in the example, a small gap.

Balance Tiers and Fund Type

Some banks pay different rates at different balance levels, and a single APY input cannot show that. Fund type matters too. The SEC notes that government funds put 99.5% or more of their assets in cash, government securities or fully backed repurchase agreements, while prime funds hold corporate and bank debt.

A money market account is an insured bank deposit, and a money market fund is an uninsured investment. Their growth math is the same, but their risks differ.

Rule 2a-7 limits fund risk. A fund may not buy an instrument maturing in more than 397 days. Its dollar-weighted average maturity cannot exceed 60 days, and its weighted average life cannot exceed 120 days. Most funds must keep at least 25% of assets in daily liquid assets and 50% in weekly liquid assets. Tax-exempt funds are exempt from the daily test.

APY vs APR for Savings Rates

APY includes compounding, while APR is the simple yearly rate before compounding. A 4.5% APR compounded monthly equals a 4.59% APY. A 4.5% APY equals about a 4.41% nominal rate compounded monthly. Enter APY here, and convert other quotes with the APR vs APY calculator.

Building an Emergency Fund

The emergency preset starts with $5,000, adds $300 a month at a 4% APY and reaches $17,066.65 in 3 years. Set your target first with the emergency fund calculator, then test how long the plan takes.

Saving for a Near-term Purchase

For a car, tuition bill or home down payment within a few years, the year-by-year table shows when the balance crosses your goal.

Comparing Two Quotes

Run the same deposit at two APYs, or add a fund fee, to see the dollar gap. Small rate gaps look minor as percentages but add up over several years.

Checking Real Purchasing Power

A nominal balance ignores rising prices. The SEC notes that low yields can fall behind inflation. Compare your result with the inflation calculator to see what it buys in today's money.

1. Entering an APR as the APY

An APR leaves compounding out, so entering it as an APY understates growth slightly. Convert the quote first.

2. Treating Today's Rate as Fixed

Money market rates move with short-term interest rates. A 5-year projection at one rate is a scenario, not a promise.

3. Counting a Fund Fee Twice

Check whether the yield you enter is already after fund expenses. If it is, leave the fee field at 0.

4. Assuming a Fund Is Insured

A money market fund is not a bank deposit. The SEC states that fund money is not guaranteed by the FDIC.

5. Going Past the Insurance Limit

The SEC notes that account money above the FDIC limit depends on the creditworthiness of the bank. Coverage counts per depositor, per ownership category, per insured bank.

6. Reading the Balance as Spending Power

Taxes on interest and inflation both shrink real value. At 3% yearly inflation, the example $25,860 buys about what $22,307 buys today.

The math is exact for a steady APY with month-end deposits. Real money market rates change, so treat every result as an estimate.

Yes, when it is a deposit account at an FDIC-insured bank. The FDIC lists money market deposit accounts as insured products, up to $250,000 per depositor, per ownership category, per insured bank. A money market fund is not covered.

Yes, although funds rarely lose value. The SEC says a stable-price fund must reprice if its value moves more than half a cent from $1.00, known as breaking the buck. Floating-price funds can also fall in value.

It earns $450.00 if you add or withdraw nothing, because APY already includes a full year of compounding. With $200 monthly deposits, the interest is higher because the new money earns interest too.

It depends on the bank or fund, but the APY already reflects the compounding schedule. The calculator converts the APY to an equivalent monthly rate, so daily and monthly compounding give the same yearly result at the same APY.

Most money market rates are variable. The SEC notes that fund yields generally reflect short-term interest rates. The Federal Reserve keeps the federal funds rate, a key overnight rate, near the target its FOMC sets. Banks can also reset account rates.

Only if the yield you entered does not already subtract fund expenses. Check how the fund states its yield first. Subtracting the same cost twice understates your growth.

No. Most retail and government funds aim to keep a stable $1.00 share price. Institutional prime and institutional tax-exempt funds must float their price, so shares can trade above or below $1.00.

The amount above the limit is not insured in that ownership category. The SEC notes that such money depends on the creditworthiness of the bank. Coverage is counted per depositor, per ownership category, per insured bank.

It takes about 15.7 years with no added deposits, using years = ln(2) / ln(1.045). The rule of 72 gives 72 / 4.5 = 16 years, a close shortcut.

This calculator shows growth before tax. The SEC notes that tax-exempt money market funds invest mostly in municipal securities whose interest is exempt from federal or state income tax. Check other interest with official tax guidance.

No. The calculation runs in your browser and nothing is sent anywhere. The Save button stores a result only in this browser on this device.

• FDIC: Are my deposit accounts insured? (Federal Deposit Insurance Corporation; lists money market deposit accounts and the $250,000 standard limit).
• Money Market Funds: Investor Bulletin (US SEC, Investor.gov, Nov. 4, 2024; fund types, stable and floating NAV, fees, no FDIC guarantee).
• 17 CFR 270.2a-7, Money market funds (eCFR; SEC Rule 2a-7 maturity and liquidity limits).
• Regulation DD Appendix A, Annual Percentage Yield Calculation (eCFR, 12 CFR Part 1030; the APY formula and assumptions).
• Federal Reserve: Open Market Operations (Board of Governors of the Federal Reserve System; the federal funds rate and FOMC target).