Home › B.Com Banking & Insurance › Banking and Finance › Money and Financial Institutions › What distinguishes a money market deposit account?
What distinguishes a money market deposit account?
AIt allows unlimited withdrawals at any hour of the day
BIt carries no interest but charges no fees either
CIts interest rate is set at prevailing market rates
DIt can be opened only by a business, not a household
Answer & Solution
Correct answer: C. Its interest rate is set at prevailing market rates
1. A money market deposit account is a form of savings account.
2. What sets it apart is that its interest rate is set at market rates.
3. The rate therefore moves with the market instead of being fixed by the bank at its own posted savings rate.
4. It is counted among the time deposits, so free withdrawal at any hour is not its defining feature.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 15 "Understanding Money and Financial Institutions", section 15.3 U.S. Financial Institutions_
Related questions
Why can a large payment processor spot fraud better than a single merchant can?A banking chatbot is best described as what?Which service channel costs a bank the most to provide?What is happening to branch banking as mobile services spread?Which services do fintech firms typically provide?What makes international banking a high-risk venture?Why can lighter regulation abroad make life hard for a bank expanding overseas?Why do large banks look beyond their own national borders?