The Hidden Gem of Money Market Accounts
Investing your money can be scary especially in this tumultuous economic state. One of the most popular ways to invest your money is through money market accounts. They are basically a mutual fund that you invest in shorter investments.
The goal of money market accounts is to invest whilst reducing the chance that every single of us have to run into bankruptcy due to the market fluctuating. All money market accounts are supervised by the SEC, the Securities and Exchange Commission.
The SEC set out policies in the early 1940’s that gave out provisions as to how they may be invested. These same guidelines state that an investors’ money market accounts must have a Weighted Average Maturity less than 90 days, and that the funds must be distributed so that no more than 5% is dedicated to one specific issuer.
One of the most ordinary money market accounts securities are short-term bonds, repurchase agreements, or even commercial paper. The SEC has also assured that all securities must be liquid with a secure financial value.
A great thing in relation to money market accounts is that they offer the account holder a high interest rate than a common bank account. But, it is worth noting that for many money market accounts you might be needed to maintain a minimum balance in your account, and you may only be able to have so many transactions during a specific statement period.
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