money market deposit account


money market deposit account
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 the bank although they are influenced by prevailing rates for money market instruments traded in capital markets. Some banks index the rates that they pay on MMDAs to rates paid for traded money market instruments such as U.S. Treasury bill rates. Federal regulations limit the number of transactions that can be made from these accounts. American Banker Glossary
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An account that pays interest based on short-term interest rates. Same as a money market demand account ( MMDA)

Financial and business terms. 2012.

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