Indeed, the short maturity of these asset holdings is an objective of these funds so as to retain the deposit-like nature of their liabilities (called shares). The major difference between deposits and money market mutual fund (MMMF) shares is that interest-bearing deposits

(below $250,000) are fully insured by the FDIC, whereas MMMF shares are not. Moreover, because of bank regulatory costs (such as reserve requirements, capital adequacy requirements, and deposit insurance premiums), bank deposits generally offer lower interest rates or returns than noninsured money market mutual funds. Thus, the net gain in switching to a money market mutual fund is a higher return in exchange for the loss of FDIC deposit insurance coverage. Many investors appeared willing to give up FDIC insurance coverage to obtain additional returns in the late 1990s and 2000s? LO.1