- Money market account
Money market accounts typically have a relatively high rate of interest and require a higher minimum balance (anywhere from 1000 to 10,000 to 25,000 dollars) to earn interest or avoid monthly fees. The resulting investment strategy is therefore similar to, and meant to compete with, a money market fund offered by a brokerage. The two account types are otherwise unrelated.
In the United States, a deposit account is considered a savings account for some purposes, but is an account upon which checks can typically be written (subject to certain restrictions). Like a Negotiable Order of Withdrawal account, it is structured to comply with Regulation Q, which forbids paying interest on checking accounts. Thus money market deposit accounts are accounts that bear interest, and on which checks can be written, but, due to various restrictions, are not legally checking accounts, and thus do not run afoul of Regulation Q.
Since the account is not considered a transaction account, it is subject to the regulations on savings accounts: only six withdrawal transactions to third parties are permitted per month. Banks are required to discourage customers from exceeding these limits, either by imposing high fees on customers who do so, or by closing their accounts. Banks are free to impose additional restrictions (for instance: some banks limit their customers to six total transactions). ATM transactions may or may not be counted.
- Money Market Funds Enter a World of Risk September 18, 2008, New York Times
Wikimedia Foundation. 2010.
Look at other dictionaries:
Money Market Account — A savings account that offers the competitive rate of interest (real rate) in exchange for larger than normal deposits. Also known by the acronym MMDA , which stands for money market demand account or money market deposit account . Many money… … Investment dictionary
Money Market Account Extra - MMAX — An account structure that provides depositors with the ability to secure FDIC insurance on large deposits that would otherwise exceed the normal insurance limit of $250,000. The MMAX structure allows banks to attract large depositors, including… … Investment dictionary
insured money market account — /ɪnˌʃυəd mʌni ˌmɑ:kɪt əˌkaυnt/ noun a high yield account, in which the investor has to deposit a certain minimum sum, which is insured by the provider against capital loss. Abbreviation IMMA … Dictionary of banking and finance
Money market deposit account — A money market account is a deposit account with a relatively high rate of interest, and short notice (or no notice) required for withdrawals. In the United States, it is a style of instant access deposit subject to federal savings account… … Wikipedia
Money market fund — This article is about the type of mutual fund. For the type of bank deposit account, see Money market account. A money market fund (also known as money market mutual fund) is an open ended mutual fund that invests in short term debt securities… … Wikipedia
Money market — This article is about the financial market. For the fund type, see Money market fund. For the bank deposit account, see Money market account. Finance … Wikipedia
Money Market Yield — The interest rate earned by investing in securities with high liquidity and maturities of less than one year such as negotiable certificates of deposit, U.S. Treasury bills and municipal notes. Money market yield is calculated by taking the… … Investment dictionary
money market deposit account — ( MMDA) A bank deposit account designed to pay a higher rate of interest to depositors than might otherwise be earned in checking or savings accounts. Money market deposit accounts do not have specified maturities. Their rates are administered by … Financial and business terms
money market deposits — ➔ deposit1 * * * money market deposits UK US noun [plural] FINANCE ► amounts of money that are invested in the money market rather than being kept in an ordinary bank account: »Money market deposits often carry a high interest rate … Financial and business terms
money market — the short term trade in money, as in the sale and purchase of bonds and certificates. [1925 30] * * * Set of institutions, conventions, and practices whose aim is to facilitate the lending and borrowing of money on a short term basis. The money… … Universalium