Money funds can be simply understood as open-end funds operated and kept by fund managers. Their main investment direction is the money market with the least risk. Compared with other funds, money funds have the characteristics of high security, high liquidity and stable income.
Money fund or fund, similar to bank wealth management products, usually has a fixed interest of more than 1 year and less than 3 years, which is not suitable for long-term holding and can be used as an investment of idle funds. The principal of money funds is relatively safe, and most money market funds have the lowest risk among all kinds of funds. Money fund contracts generally do not guarantee the security of the principal, but in fact, due to the nature of the fund, money funds rarely lose the principal in reality.
The investment threshold of money funds is generally 1000 yuan or even several hundred yuan, which is much lower than bank wealth management products. Don't worry, you can't buy it when it's sold out. Weekend holidays also have benefits, leaving no blank period of benefits, and making full use of the remaining funds in daily life.
Simply put, Alipay's balance treasure is a kind of money fund. Compared with the bank's deposit interest, the bank's interest is unchanged for a long time. Different money funds change every day. Look at the balance treasure and you will know that it shows the seven-day annualized rate, not the interest rate.
Second, the product characteristics of the money fund?
1. Principal security: Most money market funds have the lowest risk among all kinds of funds. Money fund contracts generally do not guarantee the security of the principal, but in fact, due to the nature of the fund, the loss of the principal of the money fund rarely occurs 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 investment tools that ordinary institutions can invest in, such as exchange repurchase, but also enter the inter-bank bond and repurchase market and the central bank bill market for investment. Its annual net rate of return can generally be compared with the one-year time deposit interest rate, which is higher than the income level of bank deposits 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.
4. Low investment cost: Generally speaking, there is no handling fee for buying and selling money market funds, and the subscription fee, subscription fee and redemption fee are all zero, so it is very convenient for funds to enter and exit, which not only reduces the investment cost, but also ensures liquidity. For the first subscription/subscription, 1000 yuan, and for the second subscription, 100 yuan will be increased.
5. Dividend exemption: Most money market funds always maintain the face value of 1 yuan. The income is calculated every day, and there is interest income every day. Investors enjoy compound interest, while bank deposits are only simple interest. Monthly dividends are carried forward as fund shares, and dividends are exempt from income tax.