An money market account ( MMA ) or money market deposit account ( MMDA ) is a deposit account that pays interest based on the current interest rate on the money market. The interest rate paid is generally higher than the savings account and the transaction account; However, some banks will require a higher minimum balance in the money market account to avoid monthly fees and to earn interest.
Money market accounts should not be confused with money market funds, which are mutual funds that invest in money market securities.
Video Money market account
United States
How it works
In the United States, holders of deposits are allowed to write checks and use debit cards to withdraw funds from money market accounts upon request. However, for regulatory purposes, the account is set up as a savings account under Rule D (FRB). Customers are permitted to make 6 withdrawals per month (excluding cash withdrawals from automated teller machines) and violations will result in a service charge of approximately $ 10 per transaction and possible account closure.
History
Deregulation of the Depository and Monetary Control Act of 1980 drives a series of steps designed for phases in the deregulation of bank deposits, allowing for wider types of accounts and ultimately eliminating interest rates on deposits. By the next Garn-St. The Germain Depository Institutions Act of 1982, on December 14, 1982, money market accounts authorized with a minimum balance of not less than $ 2,500, no upper limit of interest, and no minimum maturity, allowing up to six out-of-account transfers per month more than three with checks) and unlimited withdrawal by mail, courier, or directly. The minimum denomination was abolished on January 1, 1986, and the limitation that no more than three out of six maximum monthly outgoing transfers could by check was eliminated on May 3, 1988.
Maps Money market account
References
Source of the article : Wikipedia
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