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Money Market Mutual Funds A Better Savings Account

A money market mutual fund is one which invests in fixed income that is of high quality and short term. The objective of money market funds is to possess net value asset which doesn’t deviate from dollar one per share. Individuals interested in money markets in India can access these most easily through mutual funds however these products don’t let the small investors to hook when it comes to possessing understanding of the certificates of deposits, repurchase agreements, bankers acceptances, commercial papers and treasury bills.

Understanding the purpose of money markets in India

There are specifically three instances when these money market mutual funds, owing to their liquidity are certainly considered suitable.

  1. The money market mutual fund provides an expedient parking place for cash reserves in case the investor is not ready for making investment or is expecting a near term cash outlay.
  2. Any investor that is holding a basket of different mutual funds from one company might seldom want to transfer these assets from one fund to another. In case the investor desires selling a fund prior to deciding the purchase of another fund, a money market mutual fund provided by the similar fund company can be considered to be a perfect place where one can park the proceeds of this sale.
  3. To benefit the clients most of the brokerage firms frequently use these mutual funds thereby providing cash management services. By putting the client’s dormant cash in some money mutual fund in India, the client will earn additional percentage point in yearly returns apart from those earned by other likely investments.

One can buy these mutual funds directly from the brokerage companies or the mutual fund companies. There are many banks also that sell money market funds while most of these even have their personal proprietary funds which provide incredible money market investment options. These must not be perplexed with the money market accounts that are interest earning saving accounts. There are many investors in the market that value money market mutual fund because of two main reasons. First is that they are very stable and the other is that these generally permit free check writing thereby providing instant liquidity. Since their operations in the money market, these have been conquered by the institutional players and the retail investors. It is because of all these advantages that money market mutual fund in India is considered as one of the best savings account option.

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