Money market funds and accounts: Different in nature and purpose

MONEYWEB
LIVESTREAM
Both Money Market Accounts and Money Market Funds are designed to house funds earmarked for shorter-term use.
11 May 2021 06:50
Image: Waldo Swiegers/Bloomberg
Because their names are so similar, many people are unaware of the differences between a Money Market Account and a Money Market Fund and, as a consequence, are not aware of the different purposes that these two structures are designed to achieve. Money market accounts and funds are very different in respect of how they are regulated and structured, what interest is paid or earned, how fees are charged, the risk that they present to the consumer, and how they should best be incorporated into one’s portfolio to ensure they are fit for purpose.

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