The interest rate on a NOW account is set by the financial institution. The rate is usually lower than the interest rate on savings accounts. There are certain limitations to this type of account. You may only write three checks per month or three transactions per month, such as pre-authorized transfers or automatic payments. An MMDA is not a true demand type of checking account.
Some people use it as a form of savings.
They are similar to the NOW accounts offered by banks. However, the monthly service fee or check charges are often lower than a bank.