1. Money Market: Introduction
  2. Money Market: What Is It?
  3. Money Market: Treasury Bills (T-Bills)
  4. Money Market: Certificate Of Deposit (CD)
  5. Money Market: Commercial Paper
  6. Money Market: Banker's Acceptance
  7. Money Market: Eurodollars
  8. Money Market: Repos
  9. Money Market: Conclusion

 

Money market transactions involve short-term instruments with a maturity of one year or less. Money market securities are very liquid, and are considered very safe. As a result, they offer a lower return than other securities.

 

The easiest way for individuals to gain access to the money market is through a money market mutual fund which are sold through a stable NAV, usually $1 per share.

 

·         T-bills are short-term government securities that mature in one year or less from their issue date.

·         T-bills are considered to be one of the safest investments, and are often referred to as “riskless.”

 

·         A certificate of deposit (CD) is a time deposit with a bank. CDs are safe, but the returns aren't great, and your money is tied up for the length of the CD.

 

·         Commercial paper is an unsecured, short-term loan issued by a corporation. Returns are higher than T-bills because of the higher default risk.

 

·         Banker's acceptances are negotiable time drafts for financing transactions in goods. BAs are used frequently in international trade and are generally only available to individuals through money market funds.

 

·         Eurodollars are U.S. dollar-denominated deposit at banks outside of the United States.    The average Eurodollar deposit is very large. The only way for individuals to invest in this market is indirectly through a money market fund.

 

·         Repurchase agreements (repos) are a form of overnight borrowing backed by government securities.

 


Related Articles
  1. Investing

    The Money Market

    The money market provides a relatively stable place to park capital that may be needed within a short time horizon.
  2. Investing

    Getting To Know The Money Market

    If you need liquidity and safety on a sum of money, don't forgo potential interest by keeping the funds as cash.
  3. IPF - Banking

    Introduction To Money Market Mutual Funds

    Learn about the easiest way to benefit from money market securities.
  4. Investing

    The Basics Of The T-Bill

    The U.S. government has two primary methods of raising capital. One is by taxing individuals, businesses, trusts and estates; and the other is by issuing fixed-income securities that are backed ...
  5. Investing

    Get A Short-Term Advantage In The Money Market

    This investment vehicle is often the perfect stop-gap measure for growing your money.
  6. Retirement

    Introduction To Retirement Money Market Accounts

    Money market funds are used in retirement plans and accounts because they are liquid, stable and pay competitive rates of interest.
Trading Center