Money fund investment income is tax-free, because the face value of most money funds is always one yuan, and the income is calculated every day. After calculation, it is directly added to the account of the money fund, so that investors can enjoy the compound interest of the income, which is also an advantage that bank deposits cannot surpass. All the dividends of these money funds are converted into fund shares, which are completely tax-free. Not only that, there are no fees, subscription fees and other expenses when the money fund invests, just like bank demand deposits, but it takes 2 to 3 days for the money to arrive at the account when it is redeemed.

Money fund investment risk:

In theory, every investment and wealth management product has risks, but the risks are not great.

Monetary fund operation: fund companies obtain income through various investment portfolios and allocate fund shares. Monetary fund is an open-end fund. According to the types of financial products invested by open-end funds, open-end funds can be divided into four basic types: stock funds, hybrid funds, bond funds and monetary funds. The first two belong to the capital market, and the latter is the money market. The money fund mainly invests in bonds with a remaining maturity of less than 397 days (including 397 days), central bank bills with a maturity of less than one year (including one year), bond repurchases, bank time deposits, certificates of deposit, cash and other liquid money market instruments. Also known as "quasi-savings product", its main features are "worry-free principal, convenient demand, regular income, diary income and monthly dividend"

There are some risks in money fund investment, but compared with other investment methods, the risks are still relatively small. The risk of money market funds comes from the short-term bonds they invest in and the changes in market interest rates.

When the market interest rate suddenly changes and the short-term bond interest changes, the fund fails to adjust in time, resulting in a decline in overall income.

There is also the risk of competition from its own industry, and the calculation of its seven-day annualized rate of return is based on the most favorable price of the fund company in the income curve of the day. Causing the difference between quoted income and actual income.