Investing in Cash

Money Market Funds

Are money market funds taxable investments?

The income generated on money market mutual funds may be taxable or tax free, depending on the types of securities that make up the fund’s portfolio. For example, investors in a money market fund that purchases tax-free municipal bonds may not have to pay taxes on the dividends generated during the filing year. Money market funds that invest in corporate bonds could generate taxable income to the investor.


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