Considering opening Money Market account...?

Question

Bank 'A' has an APY of 0.25%

Bank 'B' has an APY of 1.01%

-Why such a difference? I don't know which to choose.

('A' is "M&I" and 'B' is "Coulee Bank"- both in La Crosse, WI)

Answer 1

Some banks have what's called a teir money market and some are fixed rate. If you get a teired account you get a higher rate depending on how much you deposit. If the other is a fixed rate that's why it's so much lower.

The tier would explain the higher rate. Go with the higher rate. The more interest it builds then the more interest you'll earn. Just make sure that if it's a promotional rate they will let you close it and move it to a different account without paying a penalty.