What is a money market fund?

[riya]

I keep hearing about money market funds as an investment option, but I’m not totally clear on what they are. From what I understand, they’re supposed to be relatively safe and provide some interest, but how exactly do they work? Are they similar to savings accounts, or are they more like mutual funds? Also, what are the pros and cons of putting money into a money market fund compared to just keeping it in a high-yield savings account? Would love to hear your thoughts and experiences.

 

[Rick_Grimes]

A money market fund is a type of mutual fund that invests in short-term, low-risk debt like government bonds or commercial paper. It aims to preserve your money while earning a small return.

 

[robertwilliam]

Money market funds represent an investment for mutual funds of money in short-term, high-grade instruments such as Treasury bills, commercial paper, or repurchase agreements. Thus, they provide an opportunity to the investor to keep their capital-safe, liquid, and yet earn interest-a small return.

 

[brook]

A money market fund is a mutual fund that invests in short-term, low-risk investments. It's safe and offers liquidity, meaning you can withdraw money at will with a somewhat stable return.

 

[Lucky]

A money market fund is a type of mutual fund that invests in low-risk, short-term securities like government bonds and certificates of deposit. It offers investors stability, liquidity, and modest returns. While not insured like a savings account, it is considered a relatively safe investment option for those seeking to preserve capital and earn income.

 

[Mayank]

A money market fund is a type of mutual fund that invests in short-term, low-risk financial instruments like Treasury bills, certificates of deposit, and commercial paper. It aims to provide liquidity, capital preservation, and modest returns for investors.