Money Market Rates 101

Money market funds are very different from money market savings accounts in many ways and are usually a base investment type for hedging funds until a better opportunity for long term investment comes up.  Since there is a difference, we here at Money Market Rates 101 thought we should go over them for you so you can know your options regarding Vanguard money market funds.

Vanguard is an investment firm that offers money market funds for various uses.  Vanguard money market funds are used for stable interest income, convenient money access (there are no terms with money markets), short-term savings, and of course to park cash while awaiting other investment opportunities with Vanguard funds or any other investment bank.

Several options make Vanguard money market investments even more useful for the investor in Vanguard funds.  Scheduled regular automatic investments can be made from money market at Vanguard into other investments (and back again) to increase the return of the money market funds.  Fast electronic money movement from one Vanguard funds account to another can be made, allowing for quick reactions to investment opportunities.

It’s important to note that the investments that make up the interest rate that money market funds receive are always as stable as possible, which means lower returns than other, riskier investments.  These types of money market funds are also not insurable by the FDIC as they are not bank accounts, but investment accounts.  Vanguard funds are mostly invested in Treasury bonds and other stable assets.

So if you’re an investor, especially with an established firm like Vanguard, then check into money market funds available to you through Vanguard money market and see how they can help you round out your investment portfolio.