How finance folk use it
A money market fund is a type of managed fund that is made up of investments that usually mature within 1 year. These include corporate bonds, government treasury bills and other securities.
Money market funds usually give better returns than time deposits, but not as much as other investment products that fit a moderate or aggressive risk profile.
Is it good or bad?
Money market funds are a good option for people who don’t want to take much risk with their investments but are not satisfied with the interest rates from savings accounts or time deposits.
The nature of the products inside these funds makes them suitable for conservative investors. The chances that you will lose money here can be small when compared to products fit for more aggressive investors, but there is still no guarantee.
As with all investments, the bigger the risk, the bigger the potential return (the opposite is also true). As a result, the potential gains from money market funds are also not very big.
What it means for you
If you’re looking for a short-term investment that does not carry a large amount of risk, a money market fund is a good option worth exploring. Just remember that your potential gains won’t be that large, so you should see if it fits your goal.
