Income Beginner: Introduction to Money Market Funds

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All of the following are privileges of owning a money market fund except that ______.

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You may be able to withdraw funds from ATMs

You may write checks

You may use it for a business account

All of the above may be privileges of a money market fund.

All of the above may be privileges of a money market fund. Money market funds have many privileges, which make them attractive and versatile.

One way to get both money market rates and FDIC or NCUSIF protection is to invest in a _______.

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Money market fund

Savings account

Money market deposit account

Money market deposit account. If you can keep the high minimum deposit, you can get both of these features in this special type of account.

Money market funds that invest in short-term municipal securities are tax-exempt.

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True

False

True. Tax-exempt money market funds invest in short-term municipal securities.

Money market mutual funds usually invest in long-term government bonds and CDs.

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True

False

False. Money market funds hold short-term debts of both government units and corporations.

The Federal Deposit Insurance Corporation and the National Credit Union Share Insurance Fund do not insure money market mutual funds.

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True

False

True. Some investors consider this a disadvantage.

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