If you’re looking for a low-risk investment, you may want to look into money market funds. But it’s important to understand these financial instruments before you jump in. So let’s take a look.
What’s a Money Market Fund?
Money market funds are mutual funds that invest in low-risk, short-term securities such as Treasury bills and corporate bonds. They’re known for their safety, liquidity, and moderate returns. This is why they are popular among retirement savers and those looking to build an emergency fund with higher returns than a traditional savings account.Money market funds can invest in a variety of securities such as:
- Treasury bills
- commercial paper (short-term corporate bonds)
- certificates of deposit (CDs)
- municipal securities
- eurodollar deposits
- repurchase agreements
