Money market deposit account

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In the United States, a Money Market Deposit Account is a deposit account that is considered a savings account for some purposes, but upon which checks can typically be written, subject to certain restrictions.

Typical restrictions are that a fairly high minimum balance must be maintained in order to avoid fees.

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, only three of which may be paid by check. 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.

In theory these restrictions allow the bank to invest the money with more discretion, allowing a higher return. The return is often competitive with money market mutual funds, hence the name on the account, although nothing requires a bank to invest MMDA deposits in the money market (most likely they'll be invested the same as the bank's other deposits, e.g. in mortgage).