Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Money Market Funds, Explained

A money market fund is a mutual fund that buys securities such as Treasury bills, short-term commercial debt, and certificates of deposit. It sticks to short-term, high-quality securities and is relatively safe and liquid. Money market yields vary according to short-term interest rates. But they fall dramatically short of the stock market's historical average return of 10-11% per year. They're generally ill-suited for long-term savings, but they're great for short-term investments, such as for money you'll need in the near future.

Remember that the only money you should have invested in stocks is money that you won't need for at least five (ideally 10 or more) years. Money you'll need sooner should be in short-term savings. Visit our Savings Center for more scoop on your options and some special interest rates.

Our 60-Second Guide to Short-Term Savings may also be of interest. It offers tips such as:

"If you're having trouble saving, we highly recommend an automatic transfer program. You can also see if your employer will split your paycheck (direct deposit) between your ordinary account and your short-term savings account."

To learn more about investing Foolishly, visit our Fool's School and our Investing Basics area. Or check out some of our inexpensive and well-regarded online how-to guides (which feature money-back guarantees). You can also learn all about brokerages and find one that's right for you in our Broker Center.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 490356, ~/Articles/ArticleHandler.aspx, 10/26/2016 3:33:45 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,209.91 40.64 0.22%
S&P 500 2,140.34 -2.82 -0.13%
NASD 5,251.79 -31.61 -0.60%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes