In: Finance
Money market securities are often considered a good place to invest funds that are needed in a shorter time period usually one year or less. Money market Intruments include banker's acceptance, certificates of deposits and commercial paper. Banker's acceptance are typically used to finance international transactions in goods and services , certificate of deposits are large denomination, negotiable time deposits issued by commercial paper take the form of short term, unsecured promissory notes issued by financial and non financial corporations.
Some combinations of this product makes up a money market fund . All money market funds are required to have a dollar weighted average portfolio maturity that cannot exceed 90days. While money market securities are highly liquid In a few days compared to months or years with a CD. The interest you earn on your money tends to be quite low and may not keep pace with inflation.