In recent years, the yield of money funds has been declining. When the money fund first became popular, the yield even reached 3% and 4%, far exceeding the interest income brought by bank deposits. With the change of the market, the yield of the money fund has been declining, even falling to 0.8% and 0.9%. So what is the reason for the decline in the yield of money funds? Let's get to know each other.

What is the reason for the decline in the yield of money funds?

1 The new regulations of the Monetary Fund clearly point out that institutions or individuals other than banks cannot be used as advance parties, which means that the sources of advance funds of the Monetary Fund are reduced. In the process of operation, the money fund will need to reserve more cash to deal with daily fund redemption. The more cash reserves, the less money for investment, and the overall income of the money fund will also decline.

2. The decline in the yield of money funds caused by the downward interest rate in the money market. The main investment scope of the money fund is short-term monetary instruments with good liquidity, including government bonds, bank deposits and central bank bills. The downward interest rate in the money market means that the return on investment targets will decline, which will naturally lead to a decline in the yield of money funds.

3 the decline in bank loan interest rates will also lead to a decline in the yield of money funds. The income of the money fund is closely related to the interbank lending rate, and the change of interbank lending rate is mainly influenced by the macroeconomic environment and monetary policy regulation.

In short, there are many reasons for the decline in the yield of money funds. Although the yield of money fund has declined, it is still the first choice of many users in the investment market. Monetary fund still occupies an important position in investment. After all, compared with other investment products, the risk of money funds is relatively small, and the flexibility of funds is still good.