If You Want To Be Rich, We Can Help You! | All About Money Market Mutual Funds

Money market mutual funds are mutual funds that are required by law to invest in securities that are low risk (generally debt instruments maturing in under 90 days). What this means to the investor is that these funds are considered low risk. In addition, money market mutual funds pay dividends to shareholders that contain short term interest rates.

Examples of money market investments are: commercial paper of companies, certificates of deposits and government securities. It is important to note that money market funds are not insured; however money market funds are still considered sound investments. The government can, if needed, raise funds to cover expenses by utilizing taxes and that is why this kind of investment is considered safe.

In addition, money markets are considered favorable to many investors because they are looked upon as investments that are fluid. What this means for you and me is that you can take money out of your account without giving a notice ahead of time. And, there is no penalty if you take money out of your account. In comparison, if you were taking money out of your banking account you would be charged a fee for an early withdrawal.

Other advantages of money market mutual funds are:

• They are easy to set up and maintain and can, in the beginning, be funded by connecting to one’s checking account.
• Money market funds are thought of by many, as the equivalent of cash.
• They are considered safe because the SEC requires and ensures, that these market mutual funds are invested as high as 95% –that is– of their assets in securities such as T-bills and top rated privately-issued paper.
• And, the returns on money market mutual funds are usually higher than on savings.

To conclude, money market mutual funds are a great option for those who are looking for an investment that offers flexibility and access to one’s funds.

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