Investing term

What is Money market fund?

A fund that holds very short-term, high-quality debt (like T-bills) and aims to stay stable at a $1 share price.

A money market fund holds very short-term, high-quality debt — like Treasury bills and top-rated commercial paper — and aims to keep a stable $1 share price while paying interest. It's a low-risk place to park cash that earns more than an idle account, often used for an emergency fund or money waiting to be invested. Safe, but not formally guaranteed like a bank deposit.

For example

You hold cash in a money market fund earning 4.5% between investments, instead of letting it sit at near-zero in your brokerage's default account.

Money market fund is taught hands-on in Stage 4 — Stocks, Bonds, Cash & Alternatives.

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Related terms

AlternativesInvestments outside the core stocks/bonds/cash mix — REITs, commodities, gold, crypto.BondA loan from you to an issuer (government or company), repaid with interest on a known schedule.Capital gainThe profit from selling an investment for more than you paid.CommodityA raw physical good like gold, oil, wheat, or copper — priced by the ounce, barrel, or bushel.
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