Top 3 Money Market Funds to Consider in 2018
Explore the top three money market funds for 2018, offering safe investment options with stable returns. Learn about leading providers like Vanguard, Charles Schwab, and American Century, and understand the benefits and risks associated with short-term debt investments. This guide helps investors choose secure, liquid assets to supplement their savings and retirement plans effectively.
Money market funds are a type of mutual fund that generate consistent income by investing in short-term, high-quality debt instruments. While the stock market can be unpredictable, money market funds are considered a safer investment option for securing your financial future. They offer low-risk, low-yield portfolios ideal for cash holdings, complementing retirement savings rather than replacing employer-sponsored plans. Investing in leading money market funds can provide additional income streams with minimal risk.
Understanding the advantages and disadvantages of these funds can help you make informed decisions.
Advantages
Low-risk investment providing stable returns
Invests in highly liquid securities and assets
Disadvantages
Low yields may not keep pace with inflation, reducing purchasing power
Expenses and fees can affect overall profits
Not insured by the government, unlike some savings accounts
Stocks and securities often offer higher returns over time
While returns from these funds might be modest, they are suitable for investors prioritizing safety and liquidity.
For those seeking stable, safe returns, consider the following top money market funds and providers:
Vanguard
Vanguard offers affordable money market funds that safeguard your cash from market volatility. Their options include taxable and tax-exempt funds, allowing you to build a diversified portfolio across Federal, Prime, and Treasury markets with expense ratios as low as 0.09%.
Charles Schwab
Charles Schwab provides reliable funds across government, prime, and municipal sectors. These funds prioritize capital preservation, liquidity, and income, investing mainly in U.S. and international securities, as well as short-term municipal bonds.
American Century
American Century features five low-risk, short-term funds, including California Tax-Free, Prime, and U.S. Government Money Market Funds, with yields typically ranging from 0.61% to 1.66%. Their approach aims to maximize returns while maintaining favorable expense ratios.
Always select funds insured or backed by FDIC to protect your investments. While these funds are secure, market fluctuations can impact returns, so consulting a financial advisor or customer service is recommended to identify the best short-term investment options.
