The maturity of money market instruments ranges from 1 day to 1 year, and the income level is usually higher than the interest income of bank deposits by 1 to 2 percentage points. However, all countries and regions have a minimum investment threshold in the money market, which is usually $ 654.38+0 million or more. Therefore, the main body of investment in the money market is institutions, and it is difficult for ordinary individual investors to enter.
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1. Principal security: Most money market funds have the lowest risk among all kinds of funds. Money fund contracts generally do not guarantee principal security, but in fact, due to the nature of funds, money funds rarely lose principal in reality. Generally speaking, money funds are regarded as cash equivalents.
2. Strong liquidity: liquidity can be comparable to demand deposits. The fund is easy to buy and sell, with short time to receive funds and high liquidity. Generally, the funds will arrive in a day or two after redemption. At present, some fund companies have opened the instant redemption business of money funds, which can be received on the same day.
3. Higher yield: Most money market funds generally have the income level of national debt investment. Money market funds can not only invest in exchange repurchase and other investment tools that ordinary institutions can invest in, but also enter the inter-bank bond and repurchase market and the central bank bill market for investment, and their annual net rate of return can generally be comparable to the one-year time deposit interest rate.
Higher than the income level of bank savings in the same period. Moreover, money market funds can avoid hidden losses. When there is inflation, the real interest rate may be very low or even negative. Money market funds can keep abreast of interest rate changes and inflation trends and obtain stable and high returns.