Money Market Funds

Mutual funds that hold very short- term securities are known as money market funds. By convention, money market securities are those with a maturity of one year or less. Typical money market assets include Treasury bills, negotiable certificates of deposit, and commercial paper, issued by the federal government, banks, and corporations, respectively. There are both taxable and tax-free money market funds. The taxable variety is by far the more popular, with ten times the assets of the tax-free type.