Government Money Market Instruments
The Government and many of its agencies will go to the money market to obtain short- term funds. Some of the government money market instruments include:
- Treasury Bills
- Treasury and agency securities with less than one year remaining
- Short term discount notes issued by government agencies
Municipal Money Market Instruments
State and local government will sell securities in the municipal money market to obtain short-term financing. The municipal money market instruments are:
- Bond anticipation notes
- Tax anticipation notes
- Revenue anticipation note
- Tax and revenue anticipation notes
- Tax exempt commercial paper
Government and municipal issues with less than one year to maturity, regardless of the original maturity, may be traded in the money market.
International Money Market Instruments
Often large institutions will place US dollars in foreign accounts to earn a higher rate of interest. These dollars being held outside of the US are known as Eurodollars. A US dollar denominated account outside of the US is known as a Eurodollar deposit. These deposits typically have maturities of up to 180 days and they are traded between large European banks and institutions, much like federal fund loans in the US.
ETFs & Mutual FundsIf you need liquidity and safety on a sum of money, don't forgo potential interest by keeping the funds as cash.
InvestingFinancial instruments with high liquidity and short maturities trade in money markets. Long-term assets trade in the capital markets.
RetirementThe money market is a subsection of the fixed income market. We generally think of the term fixed income as being synonymous to bonds. In reality, a bond is just one type of fixed income security. ...
MarketsA municipal bond is a debt instrument used by a city, state, county or other local government authority to raise money for a project. Municipal bonds, often called munis, are considered a debt ...
MarketsGovernment securities are debt instruments that governments issue to raise capital.
RetirementMoney market funds are used in retirement plans and accounts because they are liquid, stable and pay competitive rates of interest.
ETFs & Mutual FundsLearn about individual municipal securities and municipal bond funds, whose principal stability and tax-free yield appeal to high-income investors.
RetirementAfter the past several years, you might be addicted to equity. But when markets turn volatile, cash is the best option. Here's why.
RetirementDiscover characteristics of money market and short-term bonds, including how the investments are alike and different, and the benefits and risks each offers.
Managing WealthThis investment vehicle is often the perfect stop-gap measure for growing your money.