Money Market Mutual Funds and Its Advantages

Since the operations in the money market are dominated by institutional players, the retail investor involvement in the money market is limited. For such retail investors who want to invest in the money market, money market mutual funds provide a possibility to retail investor to invest their money into the money market.

Here are some of the advantages of money market mutual fund –

1. It is ideal for those investors who keep their money in saving accounts of bank, because the return from money market mutual fund is higher than that of bank saving deposit.

2. It is highly liquid and hence investor can take his money whenever he requires.

3. It is safe to invest in money market mutual funds because investment of such mutual funds is in high quality securities of government or high rated corporate bonds.

4. Overhead costs of such mutual funds are also low than other type of mutual funds and hence it is an added advantage for the investor.

Hence from the above one can see that money market mutual fund is a low risk and high return source of investment for those investors who want to invest in money market.

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