What is a Money Market Fund?

A money market fund is a type of mutual fund that invests in low risk securities. Generally because the risk is lower the rate of return or interest rate is lower as well however, it will be higher than a standard savings account. Even though these securities are low risk your money is not federally insured. Money market accounts invest in commercial paper, repurchase agreements, short term bonds, government securities and other money market funds. The funds are regulated by SEC and the Investment Company act of 1940.