What are money market funds?

Money market funds are low-risk mutual funds that invest in high-quality, short-term debt securities such as government bonds and certificates of deposit. They offer returns based on short-term interest rates, making them an attractive option for investors to park cash

Are money market funds a good investment?

Money market funds typically earn interest slightly higher than a money market or savings account. Access. Unlike a money market account, investors don’t have access to funds through debit cards or check-writing privileges. Insurance. Since money market funds are investment products, they’re not insured against loss by the FDIC or NCUA.

Does a money market fund make sense?

A money market fund may make sense for fast, flexible access to your cash. If you already have an account with a brokerage firm, you may choose to put your cash in a money market fund until you use it to, say, pay a bill or buy a stock or other mutual fund. When might a CD make sense?