Great question!
💵 What are Money Market
Funds?
Money market funds are a type of low-risk mutual
fund that invests in short-term, high-quality debt, such as:
- Treasury
bills (T-Bills)
- Certificates
of deposit (CDs)
- Commercial
paper (short-term loans to companies)
- Repurchase
agreements
These funds are designed to offer stability, liquidity,
and a modest return.
🧠 In simple words:
A money market fund is like a super-safe savings
account
that invests your money in very short-term, stable investments
to give you a small profit with very low risk.
📊 Key Features:
|
Feature |
Description |
|
Risk |
Very low |
|
Return |
Low, but better than a typical savings account |
|
Liquidity |
Very high – you can withdraw quickly |
|
Investment Type |
Mutual fund (not a bank product) |
|
Goal |
Capital preservation + small income |
|
Access |
Available via brokers like Schwab, Fidelity, Vanguard |
🏦 Common Uses:
- Storing
emergency cash safely
- Temporary
holding place while waiting to invest
- Part
of a conservative investment portfolio
- Used
by investors who want to avoid market risk
✅ Benefits:
- Very
safe and stable
- Easy
to access your money
- Better
returns than keeping cash idle
- No
long-term lock-up periods
⚠️ Things to Know:
- It's
not FDIC insured (unlike savings accounts), but still very low risk
- Returns
are not fixed—they can change daily
- It’s
a mutual fund, so it may have small fees (often very low)
🛡️ Example:
You invest $1,000 in a money market fund.
After a year, you earn around $40–$50 in income.
Meanwhile, your principal ($1,000) is still safe and accessible anytime.
🇰🇭 In Khmer:
Money Market Funds គឺជាប្រភេទមូលនិធិដែលវិនិយោគទៅក្នុងបំណុលរយៈពេលខ្លីដែលមានសុវត្ថិភាពខ្ពស់ដូចជា
ប័ណ្ណបំណុលរដ្ឋ (T-Bills), បណ្ណបញ្ញើ (CDs) និងបំណុលអាជីវកម្ម។
វាត្រូវបានប្រើដើម្បីរកប្រាក់ចំណេញតិចៗដោយមានហានិភ័យតិចបំផុត។
Would you like to see how to buy one with your investment account (e.g., Schwab)?