REQUIREMENTS
- Fill out a proposal form.
- KRA pin
- Premium payment
OUTLINE
A money market fund is a mutual fund that invests in short-term, low-risk, and highly liquid financial instruments. These funds are designed to provide investors with a safe and easily accessible place to park their cash while earning a modest return that is typically higher than traditional savings accounts.
DETAILS AND BENEFITS
The main features of a money market fund include:
1. Investment Portfolio: Money market funds invest in a diversified portfolio of short-term debt securities, such as government bonds, certificates of deposit (CDs), commercial paper, and Treasury bills. These instruments have maturities ranging from a few days to one year, making them relatively low-risk investments.
2. Stability: Money market funds are considered relatively safe and stable investment vehicles because they focus on high-quality, low-risk securities. While they are not entirely risk-free, their goal is to preserve the principal value of the investment.
3. Liquidity: One of the key attractions of money market funds is their high level of liquidity. Investors can typically redeem their shares and access their money quickly, often within one or two business days.
4. Income: Money market funds generate income for investors through interest earned from the underlying securities in the portfolio. The yield is generally higher than a regular savings account but lower than other riskier investments.
5. Regulation: Money market funds are subject to regulations imposed by financial authorities to ensure their safety and stability. In the United States, for example, money market funds must comply with specific rules under the Securities and Exchange Commission (SEC) to qualify as regulated funds.