Money Market Funds

What are money market funds?

A money market fund is very much like a money market account. They're both liquid and low-risk, low-return. They're also both considered to be cash. You should choose one or the other to round out your portfolio with cash.

What's the difference between money market accounts and funds?

They're both considered cash. However, the funds aren't FDIC insured. Except, as of September 19, 2008, many of them are temporaly FDIC insured. A money market account also works more like a bank savings account and a money market fund works more like an investment account.

Which type of money market is better?

My personal preference is for the money market account because, first and foremost, its FDIC insured. I can also get a higher rate with a money market account. On top of that I find money market accounts to be very easy deal with. Those three things together make it seem like a no-brainer to me.

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