A Money market fund, also known as principal stability funds, is a type of mutual fund that is required by law to invest in low-risk securities. These funds have relatively low risks compared to other mutual funds and pay dividends that generally reflect short-term interest rates.
Money market funds generally invest in
- Government securities
- Certificates of deposits
- Commercial paper of companies
- other highly liquid and low-risk securities.
Money market funds are generally the safest and most secure of mutual fund investments.