Question

Compare and contrast money market deposit accounts versus money market mutual funds, MMDA's vs. MMMF's, including how they are offered and how they are insured.

Answer 1

Differences between money market deposit account and money market mutual fund are as follows-

A. Money market deposit account are insured by Federal deposit Insurance Corporation and money market mutual fund are not insured by Federal deposit Insurance Corporation.

B. Money market deposit account are liabilities for the bank whereas money market Mutual Funds are assets for the Bank.

C. money market deposit account are generally held for long-term investments and for those people who seek return matching the inflation rate whereas money market Mutual Funds will be not for the long-term because it can significantly underperform some time and it cannot fulfill the long-term goal.

D. money market Mutual Funds are offered by private brokerages whereas money market deposit accounts are offered by banks and it is also insured by Federal deposit insurance operation.

E.money market deposit accounts are more secured than the money market mutual funds