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What Is the Money Market ?

Wednesday, February 9, 2022

/ by Admin

Money Market

The money market refers to trading in very short-term debt investments. At the wholesale level, it involves large-volume trades between institutions and traders. At the retail level, it includes money market mutual funds bought by individual investors and money market accounts opened by bank customers. In all of these cases, the money market is characterized by a high degree of safety and relatively low rates of return. 

KEY TAKEWAYS

  • The money market involves the purchase and sale of large volumes of very short-term debt products, such as overnight reserves or commercial paper. 
  • An individual may invest in the money market by purchasing a money market mutual fund, buying a Treasury bill, or opening a money market account at a bank. 
  • Money market investments are characterized by safety and liquidity, with money market fund shares targeted at $1.

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