What Is a Money Market Fund?
A money market fund is a very low-risk fund that invests in short-term loans to governments and strong companies. People use it to park cash and earn interest.
How it works
The fund buys things like Treasury bills that pay back within weeks or months. The share price aims to stay at $1, and you earn interest that follows short-term interest rates.
Is a money market fund safe?
It is one of the safest investments, but not guaranteed. Unlike a bank savings account, it is not covered by government deposit insurance in the US. In very rare cases, a fund has lost a little value.
Money market fund vs savings account
A savings account is at a bank and insured. A money market fund sits at a broker and often pays a bit more. Both are for cash you may need soon, not for long-term growth.
See it in real companies
Open a company to see what it sells and how it makes money.