Ask the expert: How should I compare variable savings and money market account rates?

Q: How can I compare rates for savings accounts and money market accounts when they are changing all the time?

A: To some extent, shopping for the best CD rates is more of a sure thing than shopping for rates on savings accounts or money market accounts. That's because when you find a good CD rate, you can lock it in for a period of months or years, while your savings and money market rates are subject to change from day to day.

Even so, shopping for savings and money market rates can be worthwhile if you follow a couple of rules:

    1. Don't get distracted by teaser rates. These are special rates offered for a set initial period. Unless the terms of those teaser rates are especially compelling - e.g., an exceptionally high rate that is locked in for several months - you should make your decision more on the ongoing rate of interest offered than on any short-lived promotion.
    2. Focus on banks that consistently offer high rates. Yes, savings and money market rates can change from day to day, but the fact is that some banks consistently offer high rates. Every quarter, MoneyRates.com identifies the banks that have offered the highest rates on average over the preceding three months. This feature, called America's Best Rates, is a good place to start when shopping for rates.


      There's nothing you can do to lock in savings and money market rates over the long term, but if you follow the above rules you should increase your chances of getting consistently competitive rates. Plus, remember, in a low interest rate environment, the flexibility of savings and money market rates can be an advantage. Should rates start to rise, you'll benefit from the fact that these rates can be more responsive to those changes than CD rates.

      Got a financial question about savings, investing, or banking? MoneyRates.com invites you to submit your questions to the "Ask the Expert" feature. Just go to the MoneyRates.com home page and look for the "Ask the Expert" box on the lower left.

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