A money market mutual fund is a type of fixed income mutual fund that invests in debt securities characterized by their short maturities and minimal credit risk.
They are among the lowest-volatility types of investments.
Income generated by a money market fund can be either taxable or tax-exempt, depending on the types of securities in which the fund invests.
All money market funds comply with industry-standard regulatory requirements regarding
Diversification of the fund’s investments.
Investments can include short-term
U.S. Treasury securities
Federal agency notes
Certificates of deposit
Corporate commercial paper, and
Obligations of states, cities, or other types of municipal agencies depending on the focus of the fund.
How does it work?
Money market mutual funds (MMMF) are used to manage short-term cash needs.
These funds are open-ended in the debt fund category and deal only in cash or cash equivalents.
Money market securities have an average maturity of one-year that is why these are termed as money market instruments.
How to Invest?
You can invest in money market funds with ClearTax in a hassle-free and paperless manner by following the below-mentioned steps:
Step 1: Register for an investment account by logging on to https://cleartax.in/save
Step 2: Enter the details requested
Step 3: Complete your KYC, the whole process can be completed within five minutes
Step 4: Choose and invest in the most suitable money market fund