Understand Investments, Financial Products and Make Money!
Tuesday January 16th 2018

Best money market funds

By definition, money market funds are typically invested briefly-term, fixed income investments as the U.S. Treasuries. These investments are those with maturities of not up to a year. Money market funds usually offer high rates of return in comparison to standard savings account. You may also write checks against these funds and even make ATM withdrawals from them.

Unlike money market deposit accounts, money market funds are mutual funds and not bank accounts that are normally insured by government agencies. A twin of other sorts of mutual funds like stocks and bond funds, money market funds also incur expenses that decline in value.

Money market funds are usually known as liquid investments which are used to store money that’s not currently invested. These funds are probably used by financial institutions as money market funds are one of several safest forms of mutual funds.

Although money market funds are the safest, there are still risks that make it viable for failure. The most important risk to date in investing in money market funds is the danger that inflation will out space the return funds which in the end erodes the purchasing power of the investor’s money.

Money market funds have several forms. There are Treasury-only funds, government-only funds (debit from government agencies and treasury) and general money funds with sub categories of prime funds and first-tier funds. All money market funds are of top quality and pledge to keep a fix price of $1.00 regardless to issues of interest rates, bond market or the economy. One of many three kinds of money market funds, the treasury – only fund is easily the safest variety of money.

The sole purpose of money market funds remains to be to supply investors with a safe place to take a position easily accessible cash equivalent assets with main characteristics of a low-risk, low-return investment.

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