Money Market Mutual Funds are lending instruments that lend to companies for up to one year. These funds are structured to allow the fund manager to achieve higher returns while maintaining the risk under control by modifying the length of the loan. Usually, the higher lending tenure comes with higher returns. Money Market Mutual Funds will invest in government securities, RBI-issued Treasury bills, private company documents, etc. If you are a moderate risk-taker looking for higher returns over bank FDs, you can invest in mutual funds on the money market.
How Does Money Market Mutual Funds work?
Money market mutual funds are used for the allocation of short-term liquidity needs. These assets are open-ended in the context of bond securities, which either trade with currency or cash equivalents. Securities in the stock market have a typical one-year maturity; this is why they are considered money market instruments.
7 Best Money Market Mutual Funds in 2020:
> BMO Harris – with an APY of 1.75%
BMO Harris, which has its U.S. headquarters in Chicago, has nearly 600 branches in Arizona, Florida, Illinois, Indiana, Kansas, Minnesota, Missouri, and Wisconsin.
For the platinum money market account you can request verification, and you can get an ATM card too. There are also no recurring maintenance costs for platinum money market transactions, so you don’t need to hold a fixed balance in the transaction.
* Minimum Deposit of $5000 for APY
* It’s the best for High Yield
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> UFB Direct – with an APY of 1.70%
UFB Direct is an online bank that offers a savings account and a money market account. Axos Bank is a subsidiary of UFB Main. It is classified as a website which accepts deposit under the FDIC certificate of Axos Bank. Like other online-based banks, brick-and-mortar organizations don’t have the prices.
Therefore, it can reliably give some of the best prices for all its goods. The money market position is especially strongly profitable, though not just in terms of APY. UFB’s money market account combines the high yield of a money market deposit with the ease of a checking account and enables you to issue a small number of checks every month.
* Minimum Deposit for Interest rate: $25000
* It’s the best for high rates and accessibility.
> Investor E-Access: With an APY of 1.50%
Investors E- access is an Investors Bank term for the exchange. Investors Bank is headquartered in Short Hills, New Jersey, and was established in 1926. The corporation has about 150 offices in New Jersey and New York. But consumers should take advantage of the eAccess Money Market which has a favorable APY in the other 48 nations.
* No Minimum Deposit Required.
* It is the Best for high rates with no minimum deposit.
> CIT Bank: With an APY of 1.65%
CIT Bank is the primary, national bank of CIT. Banque CIT, N.A. Is a member of CIT Community Inc. CIT Bank operates two deposit plans, in addition to its money market portfolio. In November 2019, CIT Bank released its checking account too. In addition to its liquid deposits, CIT Bank now provides eight CD terms, four Jumbo CD terms and an 11-month no-penalty Card.
* You have to deposit Minimum $100 to open an account.
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> TIAA Bank: With An APY of 1.40%
One of the biggest benefits you can find with TIAA Bank is its “Yield Pledge,” which guarantees that it will always be competitive in its yield pledge money market account rate and in the top 5 percent. Its money market account also does not have a monthly charge, makes mobile check deposits and is eligible for the IRA. TIAA Bank will refund all ATM fees paid by other banks as long as you hold at least $5,000 in your yield pledge money market account.
* A minimum deposit of $500 is required to open an account.
> Discover Bank: With an APY of 1.25%
Discover the money market account for this form of account has many of the top features offered. There are 60,000 ATMs nationwide which can be used by customers of Discover Bank’s money market program. There are also free regular checks on the money market account, and free official bank checks.
* Opening balance of $2500 is required.
* It’s the Best for No Fee Access of ATMs nationwide.
> Sallie Mae: With an APY of 1.25%
Along with reasonable interest rates, no minimum balance and no monthly maintenance fees are expected on Sallie Mae’s money market account. Account-holders can write checks from their accounts, and at any time control their accounts entirely online.
* No Minimum Deposit Required for the interest rate.
Through holding a well-diversified portfolio of money market securities, a Money Market Mutual Fund aims to provide the highest short-term profits. Investors with a limited investment period of up to one year are allowed to invest in such funds.
Many low-risk individuals who have their excess cash deposited in a savings bank account will invest in Money Market Funds. Such funds can generate better returns than a standard savings bank account. Investors may be both corporate and institutional investors.