[1] The interest rates paid are generally higher than those of savings accounts and transaction accounts; however, some banks will require higher minimum balances in money market accounts to avoid monthly fees and to earn interest.
They are insured by the FDIC (unlike money market funds), and although they may provide checking services, the restrictions of Federal Reserve Regulation D have discouraged their use for day-to-day payment purposes.
In practice, money market accounts are distinguished from ordinary savings accounts by their higher balance requirements and their more complex interest rate structure.
The Depository Institutions Deregulation and Monetary Control Act of 1980 set in motion a series of steps, designed to phase in the deregulation of bank deposits, permitting a wider variety of account types, and eventually eliminating interest ceilings on deposits.
Germain Depository Institutions Act of 1982, on December 14, 1982, money market accounts were authorized with a minimum balance of no less than $2,500, no interest ceiling, and no minimum maturity, allowing up to six transfers out of the account per month (no more than three by check) and unlimited withdrawals by mail, messenger, or in person.