Money Market Funds vs. Money Market Deposit Accounts

I received a number of viewer e-mails with questions about money market funds. I want to clarify the difference between a money market fund and a money market deposit account.

A money market fund is one type of mutual fund that is invested in low-risk securities — such as U.S. Treasury bonds. Money invested in a money market mutual fund is not insured.

Separately, a money market deposit account is an investment in an interest-bearing bank account that is federally insured if the bank is an FDIC institution. Therefore, an individual may be insured up to $100,000 for a standard account or $250,000 if the money is specifically in a retirement account.

Mellody Hobson

The bottom line on both — they are extremely safe investment vehicles, and the benefits of a money market fund far outweigh any of the risks.

-- This embed didnt make it to copy for story id = 5858912. -- This embed didnt make it to copy for story id = 5858912.
Join the Discussion
blog comments powered by Disqus
You Might Also Like...
See It, Share It
Bay Ismoyo, ChaideerMahyuddin/AFP/Getty Images
PHOTO: An undated booking photo shows Castor Conley.
Multnomah County Sheriffs Office
PHOTO: A visitor holds an Xbox One controller during the EGX gaming conference at Earls Court in London, Sept. 25, 2014.
Chris Ratcliffe/Bloomberg/Getty Images
Minecraft Creator Buys Ridiculous $70 Million Mansion
MLS | Inset: Yui Mok/Press Association/AP Photo