What You Need to Know Before Investing in MMFs?
Bank deposit theft has caused fear, and if you are concerned about your bank accounts, you may want to consider investing in a money market fund (MMF).
Money Market Fund (MMF) is a trust fund that primarily invests in extremely low-risk investment instruments such as short-term time deposits, bank time certificates of deposit, commercial papers, and corporate bonds.
With the goal of growing money, money market funds demand favourable interest rates and prices from banks. Money market funds will provide a little greater interest rate than bank time deposits, and the interest might be paid daily.
Money market funds have been launched by a number of domestic companies, including Public Mutual, RHB, Kenanga, and others. If you don’t have a good short-term investing aim and are concerned about your money being safe in the bank, you can invest in a money market fund.
Before investing in a money market fund, there are three things you should know.
1. The amount of time needed to deposit
The online deposit function is generally supported by institutions that support the money market funds. When a user deposits money into a money market fund, it takes two working days for the transaction to appear in the account. After two working days, if the transaction has not appeared in the fund account, you should contact the fund institution.
2. The amount of time required to withdraw
Money market funds allow users to withdraw funds at any time, although the process takes two business days.
3. Charges
There are no costs for depositing and withdrawing money from money market funds, therefore there is no risk of losing your money. If you invest RM1,000 in a money market fund, for example, it will not be less than RM1,000 when you withdraw it a month later.
