Money funds only invest in the money market, such as short-term government bonds, repurchase, central bank bills, bank deposits, etc. And there is basically no risk. Its liquidity is second only to bank demand deposits, and its income is calculated every day. Generally, the one-month income is carried forward to the fund share, and the income is slightly higher than the one-year time deposit, and the interest is tax-free. The principal of the Monetary Fund is relatively safe, with an expected annual rate of return of 3.9%. It is suitable for liquid investment tools and a substitute for savings. In general, the probability of investors' profit is 99.84%; The expected rate of return is between 3.8-5%, which is higher than the interest of 3.5% for one-year time deposit, and there is no interest tax; It can be redeemed at any time. After applying for redemption, the funds will generally arrive the next day, which is very suitable for units and individuals pursuing low risk, high liquidity and stable income.
Procurement principle:
Money fund is favored by investors because of its unique advantages of income equal to or higher than one-year fixed deposit and flexibility close to current deposit. "However, monetary funds are not bank deposits." Chongqing financial experts said that monetary funds are a cash management tool, and investors should adhere to the following principles when purchasing monetary funds.
First of all, we must adhere to the principle of "buying the old and not buying the new". "After a period of operation, the performance of a money fund can stand the test of the market. It will take time to test whether a newly issued money fund can achieve good performance." Chongqing financial experts said that the newly issued money fund still has a closed period, during which it cannot be redeemed, and its flexibility will naturally be limited.
Secondly, we should adhere to the principle of "buy high and buy low". Chongqing financial experts suggest that investors can check the ranking of the yield of money funds through relevant websites and try to choose high-yield money funds with the highest annualized rate of return.
Finally, we must adhere to the principle of "short is not long". Chongqing financial experts said that the money fund is a short-term investment and financial management tool, which is more suitable for managing liquidity, short-term funds or temporary funds whose use is difficult to determine at the moment; For medium and long-term funds of more than one year, investors should choose financial products with higher returns such as bonds and equity funds.