Municipal money markets are bank accounts set up to provide shareholders and traders more options than market fund accounts. They are backed by the US government and treasury as well as local municipals. But like other fund markets, the industry is not free of risks.
Municipal money market accounts differ vastly from the more complicated market fund accounts. For one, the annual percentage yields (APY) are higher. Second, investors have a choice to back accounts supported by either the US government or treasury. Most people go fifty-fifty and put money in market accounts supported by the US government; others go for the US Treasury-backed accounts. There are choices but then again safety is critical. Others like tax exempt money market funds in their portfolio for tax exempt money market investing.
There is actually less risk in backing a municipal money market account since the returns are higher. You can open an account simply by hooking up with a brokerage firm or mutual fund company that deals strictly with this type of account. The accounts, which are usually set up for fund investors, are easy to manage. But it is best that you study how they work, know the risks involved, and learn the pros and cons of investing in the account.
You can buy and sell market accounts like in the stock market. You can even borrow or loan money out if you like. What happens is that after you deposited your money, the banks will invest it for you. You will then earn a percentage from the return on investments, which is called a dividend. Market accounts are good alternatives to common savings, CDs, even short term bonds. In market accounts, you have daily and easy access to your money. If you want to know more about municipal money market accounts, you can Google it online for the returns and risks involved.
Ryan has been a coffee lover and drinker for many years and enjoys writing about his experiences with Municipal Money Markets. He also likes to pass on useful information of how to get the best out your coffee machine and new brewing techniques to his friends and readers on his website Mighty Bean Coffee.
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