money market fund

A money market fund is a type of mutual fund that invests in cash and cash equivalents. These funds are considered low-risk investments, offering steadier returns than the stock market and are typically sold by brokerage firms. The investments within a money market fund may include short-term U.S. Treasuries, certificates of deposit (CDs), government bonds, and corporate debt securities, all with a maximum maturity of 397 days.1

While generally safe, money market funds carry a small risk of loss, particularly in extreme market conditions. They are insured by the Securities Investor Protection Corporation (SIPC) up to $500,000, but this insurance protects against brokerage firm failure, not market losses. Money market funds are distinct from money market accounts, which are insured savings products offered by banks and credit unions.1