Are you looking to park your excess money in an instrument that gives you high safety, a bit of returns as well as high liquidity? Money market mutual funds could be one of the good options to look at. But what are these funds?
A money market mutual fund is an open-ended scheme, which invests your money in ultra-safe and high-quality liquid instruments like treasury bills, commercial paper, certificates of deposits and repurchase agreements, with having less than one-year of maturity time period. These mutual funds especially, the liquid fund invests your money in very short-term market instruments with maturity up to 91 days where you can actually keep your money for very short periods of 1-3 months and this can serve as an emergency fund.
