Investing in Cash

Money Market Funds

What investments are similar to money market funds?

Individual investors may invest in a number of money market fund-type accounts. Many banks typically offer account holders money market bank accounts. They offer higher interest rates than traditional savings accounts, but attach conditions on the number of transactions that may be initiated, as well as larger minimum balance requirements and associated penalties. Ultra-short bond funds behave similarly to money market funds, but they invest strictly in bonds of very short duration, although these securities may have more risk associated with them, and often have net asset values below the $1.00 per share benchmark. They are largely unregulated, and may invest the money in a variety of financial instruments in order to generate stated returns to account holders, but are inherently exposed to more risks than money market funds.


This is a web preview of the "The Handy Investing Answer Book" app. Many features only work on your mobile device. If you like what you see, we hope you will consider buying. Get the App