Why is money fund suitable for short-term investment?
Monetary funds are suitable for short-term investments for three reasons. First, because the investment targets selected by the Fund are short-term money market instruments, most of which are within one year and have strong liquidity, investors can redeem the Fund in a short time according to the contract requirements and realize certain income.
Second, the risk of money funds is low, because the money market instruments invested, such as short-term treasury bonds and central bank bills, are all low-risk products, which can ensure the safety of investors' funds to a certain extent in the short term.
Third, the money fund mainly charges management fees, not subscription fees, and will not charge redemption fees after holding the money fund for a certain period of time. Then the longer investors hold the money fund, the more investment costs investors need to spend, so short-term holding will be more appropriate.
What is the income situation?
Compared with other investment products, the income from investing in money funds is not high, but it will still be better than one-year time deposits.
Yu 'ebao is a typical money fund. According to the annualized income on September 7, 2023, there is still 1.97% interest. Although the 7-day annualized income is expected theoretically, the money fund itself is less affected by the market, so the final actual income will not be much different from this value. As for the one-year annual interest rate of several big banks in the same period is only 1.55%, then the income of Yu 'ebao is obviously higher than the deposit interest in the same period.