4 key differences between money market funds and high-yield savings accounts
Money market funds and high-yield savings accounts are both safe and offer liquidity, but there are key differences in terms of risk, yield, account minimums, and taxes.
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Posted 9/6/2023, 3:46:16 PM
cnbc.com
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Money market mutual funds are offering the highest interest rates in decades, attracting investors looking for higher yields with lower risk. The average interest rate of 5.15% is the highest since 1999, making money market funds a compelling option for preserving purchasing power amid rising inflation.
Investors should take advantage of the high yields offered by money market funds (MMF) due to the inverted yield curve and the current market conditions, which may provide a safe and reliable source of income in the near future.
Money-market fund assets reach new all-time high as interest rates attract investors, posing challenges for struggling banks that have seen deposit outflows.
Global money market funds saw strong inflows as investors sought safer options amid concerns over slowing growth in China and Europe and uncertainty regarding the Federal Reserve's interest rate outlook.
Investors are flocking to money market funds as a safe alternative to buying stocks or bonds, with the record high net assets of these funds potentially fueling a year-end stock market rally, according to Bank of America.