How to Find Interest Rates on Money Market Funds
Money market funds buy securities like U.S. Treasury Bills and corporate bonds with the money investors put in and pay interest in return. Many investors find money market funds appealing because they have easy access to their money and often use a money market fund as a “parking place” for their money while looking for other investments. Of course, you want to get the highest interest, so you need to know how to find money market rates.
Other People Are Reading
Instructions
-
-
1
Understand how money market funds work. Funds buy government and corporate securities for short periods (under 90 days) and collect the interest paid. They pay a specified rate that changes from week to week depending on market conditions. Financial analysts consider money market funds to be a “cash equivalent” because investors have fast access to their money. You can even write checks on a money market account as long as you keep a minimum balance. Quality funds are very stable and pledge to maintain the value of your shares (so you will get $1 back for each $1 you invest, plus the interest). You can learn more about money market funds at Kiplinger’s website (link below).
-
2
Open a money market account. Banks and brokerage houses offer money market accounts, as do individual funds. You want to consider some other factors besides interest when choosing a money market fund. The most important is the minimum investment requirement, which can vary from under $100 to $25,000. Consider including a money market account in your IRA. It’s a good place to earn some interest on funds you have not yet invested in other securities.
-
-
3
Check with your bank to find money market rates on the funds they offer to customers. Generally speaking, money market funds pay a higher rate of interest than savings accounts. Most banks will help you find money market rates on other funds as well.
-
4
Monitor the best money market fund rates online using sites that maintain up-to-date listings. Some examples are Bankrate.com, Money-Rates.com and Financial Week Listing. Below you will find links to each of these websites. One advantage of websites like these is that they provide minimum investment requirements and other information about funds of interest to investors.
-
5
Find money market rates of individual funds by watching their websites. As you become familiar with money market funds, you can learn more details about those you are interested in from their online resources. For example, the link below will take you to Fidelity Money Market Funds, which offers some of the best rates on its funds.
-
1
