Money fund is a very popular investment tool, which is suitable for short-term idle funds. So what are the advantages of buying a money fund? What's the difference between it and deposit? Xi Caijun also prepared relevant contents for your reference.

what are the advantages of buying a money fund?

1. high flexibility. Money fund is a short-term financial management tool, which mainly invests in low-risk money market tools, such as short-term national debt and bank deposits. Money funds are mostly open-end funds, and the purchase and redemption are very flexible, and investors can freely redeem some or all of their funds.

2. Good liquidity. The liquidity of the money fund is very high. When investors need funds, they only need to apply for redemption, usually within one to two working days, which is convenient for short-term capital turnover.

3. The income is stable. Although the income of the money fund is relatively low, it is usually higher than that of deposit interest rate. If investors do not pursue high risks and high returns, but seek stable asset preservation and appreciation, money funds are a good choice.

what's the difference between it and a deposit?

1. The issuer is different. Monetary funds are issued by fund companies, and investors hand over the funds to fund managers for investment. Fund companies do not assume the responsibility of repaying the principal and interest. Bank deposits are issued by banks, and the relationship between depositors and banks is creditor-debtor relationship. Banks need to ensure the safety of investors' principal and pay interest.

2. The investment threshold is different. The monetary fund has a low investment threshold, and the lowest one can be invested in 1 yuan. However, there are many types of bank deposits, and the investment thresholds are quite different. Some time deposits can be deposited in 5 yuan, while large deposit certificates usually cost 2, yuan.

3. The income is different. Generally speaking, the 7-day annualized rate of return of money funds will be higher than that of demand deposits, but its income is fluctuating, while the interest rate of bank deposits is mostly fixed, and the income is more stable.