Investing in a Money Market Fund actually has many advantages over placing fixed bank deposits?!
Recently, you may hear the term Money Market Fund (MMF). Because of the previous wave of Bank of America bankruptcies, many people have transferred their deposits to MMF. In fact, the nature of MMF is very similar to bank fixed deposits. They are all investment instruments with very low risk and steady interest income. Tonight Yatsuki will share with you some information about MMF. When we place money on a fixed deposit (FD), we actually lend money to the bank, and the bank pays us interest. When we invest our money in MMF, that is, we lend money to the government, and the government gives us interest, it's very safe. MMF is actually a type of bond, but it's a very safe bond because it's a government bond that is about to expire. The risk of bonds can be large or small; it depends on who issues the bonds. If it's a company, then it's likely to go out of business and the bonds will default. But if the bonds are issued by the government and the government goes bankrupt, then your currency will also depreciate drastically. No matter what product you invest in, the outcome is actually the same. Simply put, apart from government bankruptcy, investing in MMF is equal to zero risk, so it's perfect for people who want to save FD. Because MMF has the following advantages over FD.
First, MMF interest is calculated daily
As long as you deposit money into MMF today and start calculating interest the next day, you'll see that your money is increasing every day, and you're in a happier mood.
As long as you deposit money into MMF today and start calculating interest the next day, you'll see that your money is increasing every day, and you're in a happier mood.
Second, MMF has no time limit
When we place money on a fixed deposit, we usually set a period of time, such as 1 year. If we take out the money before 1 year, we will deduct interest or even no interest. Since MMF interest is calculated every day, there's no limit to when you pay it out. So if you have any spare money, you can put it directly into MMF, and you can take it out as soon as you need the money you need.
When we place money on a fixed deposit, we usually set a period of time, such as 1 year. If we take out the money before 1 year, we will deduct interest or even no interest. Since MMF interest is calculated every day, there's no limit to when you pay it out. So if you have any spare money, you can put it directly into MMF, and you can take it out as soon as you need the money you need.
Third, MMF generally has no fees
In fact, MMF is also a type of fund. Generally, when you buy a fund, there are additional charges, but MMF charges 0.
In fact, MMF is also a type of fund. Generally, when you buy a fund, there are additional charges, but MMF charges 0.
Fourth, in the era of interest rate hikes, MMF's interest rate will be higher than FD's.
Interest on government bonds will always be based on interest rates set by the central bank. The bank's interest, on the other hand, can be adjusted. In the era of interest rate hikes, since the central bank continues to raise interest rates, banks will not follow the central bank's interest rate in order to make money, so they will see interest on fixed deposits lower than set by the central bank. For example, the current interest rate of the Bank of America is 5.25%, but if Malaysia deposits dollars, fixed deposit interest is only about 4%. MMF interest, on the other hand, can reach 4.7% or more.
Interest on government bonds will always be based on interest rates set by the central bank. The bank's interest, on the other hand, can be adjusted. In the era of interest rate hikes, since the central bank continues to raise interest rates, banks will not follow the central bank's interest rate in order to make money, so they will see interest on fixed deposits lower than set by the central bank. For example, the current interest rate of the Bank of America is 5.25%, but if Malaysia deposits dollars, fixed deposit interest is only about 4%. MMF interest, on the other hand, can reach 4.7% or more.
Fifth, avoid bank fraud
Recently, there have been many bank fraud cases. Some fraudsters hack your phone to defraud you of the money you have in your bank. However, if you keep your money in MMF, the scammer will think that your bank doesn't have any money, and if you sell MMF, you'll have to wait a few days before the money goes into the bank, making it more difficult to be defrauded of.
Recently, there have been many bank fraud cases. Some fraudsters hack your phone to defraud you of the money you have in your bank. However, if you keep your money in MMF, the scammer will think that your bank doesn't have any money, and if you sell MMF, you'll have to wait a few days before the money goes into the bank, making it more difficult to be defrauded of.
So how do you invest in MMF? In fact, many fund companies in Malaysia can buy it. Or some international brokerage firms, such as Futu, can also buy MMF. Currently, in Futu's MMF, interest on the US dollar currency is as high as 4.76%, while interest on the new currency is as high as 4%, all of which are higher than the fixed deposit interest on Malaysian currency.
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101570962 : Good article
xlvvaGnMNo : Very enlightening article, thanks for sharing!
WVl0IgEuhf : Very detailed
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