Money Market Fund -- A complete definition

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Money Market

Money market funds are open-ended mutual funds that invest in short-term instruments. Created in the mid-1970s, money markets generally invest in such low-risk securities as commercial paper, government securities, certificates of deposit (CDs), and other

investments with maturities ranging from 20 to 70 days. Although the interest rates on money market funds change daily, a money market fund's NAV, or net asset value, remains a constant $1 per share. Money market funds are not insured, but are closely regulated by the Securities and Exchange Commission (SEC).

The SEC requires that money market interest rates be stated as a seven-day average.

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