Money market funds refer to funds that invest in short-term securities in the money market. The assets of the Fund are mainly invested in short-term monetary instruments, such as treasury bills, commercial paper, bank time deposit certificates, government short-term bonds, corporate bonds, interbank deposits and other short-term securities. Money market funds have the following characteristics: 1. Principal security: Since most money market funds mainly invest in low-risk securities such as treasury bonds, financial bonds, central bank bills, bond repurchases and interbank deposits with a remaining maturity of less than one year, these investment types determine that the risk of money market funds is the lowest among all kinds of funds, and in fact, the principal security is guaranteed. 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 two or three days after redemption. 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 is generally 2%-3%, and its recent rate of return is 2.6%-2.7%, which is much higher than the income level of bank savings in the same period. Moreover, money market funds can avoid hidden losses and resist inflation. When inflation occurs, the real interest rate may be low or even negative. Money market funds can keep abreast of interest rate changes and inflation trends, obtain stable income, and become a tool to resist rising prices. 4. Low investment cost: Generally speaking, money market funds are free of handling fees, 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. 5. Dividend exemption: The face value of most money market funds is always 1 yuan, and the income is calculated every day, with 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. In addition, general money market funds can also be converted with other open-end funds under the fund management company, which is efficient, flexible and low-cost. When the stock market is good, it can be converted into stock funds, and when the bond market is good, it can be converted into bond funds. When there are no good opportunities in the stock market and bond market, money market funds are a good haven for funds, and investors can seize various opportunities in the stock market, bond market and money market in time. It is precisely because of the above advantages of the money fund that it is better to invest in the money fund when the current interest rate on time deposits is not too high.