About the Money Market Calculator
This money market calculator projects how a money market account (MMA) at a bank or credit union, or a money market fund at a brokerage, grows over time. Enter your opening balance, any monthly deposits, the advertised APY or 7-day yield and how long you plan to hold the money. You get the ending balance, total interest, first-year interest and an estimate of interest after income tax.
It is meant for savers parking an emergency fund, a house deposit or cash waiting to be invested, who want to compare a money market option against a high-yield savings account or CD. Money market funds usually quote a net yield after the fund's expense ratio; if yours quotes a gross yield, enter the expense ratio in the fee box and it is subtracted.
The rate is treated as an annual percentage yield, so the monthly growth factor is (1 + APY)^(1/12). Rates on money market products move with short-term interest rates, so the projection assumes today's rate holds for the whole period — rerun it if your rate changes.
With the default inputs, the ending balance is $31,787.05. Change any value above to recalculate instantly.
How to use the money market calculator
- 1Enter your opening balance and any regular monthly deposit.
- 2Enter the APY for an account, or the 7-day yield for a money market fund.
- 3Add a fee only if the yield you entered is before the fund expense ratio or account fees.
- 4Choose how many years to project and your marginal tax rate.
- 5Compare the ending balance and after-tax interest with a CD or savings account.
Formula and method
Money market accounts and funds usually quote an annual percentage yield (APY) or a 7-day SEC yield, both of which already include the effect of compounding. The calculator converts that yield to an equivalent monthly rate r, so a balance left alone for a year grows by exactly the APY.
The ending balance is the opening balance compounded for n months plus the future value of your monthly deposits, which are assumed to be made at the end of each month. Interest is the ending balance minus everything you deposited. After-tax interest multiplies that interest by (1 − tax rate); it ignores the timing of tax payments, which are normally due each year on interest earned.
- B
- Opening balance
- D
- Monthly deposit
- r
- Equivalent monthly rate from the net APY
- n
- Number of months (years × 12)
Worked examples
$15,000 plus $200/month at 4.25% APY for 5 years
You deposit $15,000 up front and $12,000 more over five years, $27,000 in all. At 4.25% APY the balance reaches about $31,787, so interest adds $4,787. After 22% tax you keep about $3,734 of that interest. The first year alone earns about $684.
$50,000 parked for one year at 5%
Because the rate is an APY, $50,000 left alone for a year earns exactly 5%, or $2,500. In the 24% tax bracket, $600 goes to tax and you keep $1,900.
$10,000 plus $500/month at 3.8% for 10 years
Over ten years you deposit $70,000. At 3.8% APY the account grows to about $87,127, meaning $17,127 of interest — nearly a quarter of what you put in.
Frequently asked questions
How is money market interest calculated?+
Banks calculate interest daily on your balance and credit it monthly; funds accrue dividends daily and pay them monthly. Either way the quoted APY or 7-day yield tells you roughly what a year of growth will be if the rate does not change.
Is a money market account the same as a money market fund?+
No. A money market account is a bank deposit covered by FDIC (or NCUA at credit unions) insurance up to $250,000 per depositor, per institution, per ownership category. A money market fund is a mutual fund sold by brokers; it is not FDIC insured but invests in short-term, high-quality debt.
Money market vs high-yield savings account: which pays more?+
Rates are usually similar. Money market accounts may offer checks or a debit card but sometimes need a higher minimum balance. Money market funds can pay more when short-term Treasury rates are high. Compare the APY after any fees.
Is money market interest taxable?+
Yes. Interest from money market accounts and dividends from most money market funds are taxed as ordinary income. Funds holding only US Treasury securities are usually exempt from state income tax, and municipal money market funds can be federally tax-exempt.
What is the 7-day yield?+
The 7-day SEC yield annualizes a money market fund's income over the last seven days, after expenses. It is the standard way funds quote their rate and changes daily as short-term rates move.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.
Sources