Mutual Fund Money Market accounts
July 29, 2007
Purchasing mutual fund money market accounts is rarely discussed by brokers as an investment option for clients, despite providing returns to rival other fixed-income securities with a 40-year history of safety. Mutual fund companies in the United States reported holding $2.584 trillion in money markets assets as of July 25, 2007 according to the Investment Company Institute. Crane Data which tracks an index of the top 100 mutual fund money markets reports that as of July 28th, 2007 the average 7-day annualized yield was 4.98%. The yield is lower than the average yield of the top 100 bank money market accounts (5.04%), but mutual fund money markets are easy to open than bank money markets, have fewer check-writing restrictions than the federally mandated limitations on bank money markets, and generally deliver stronger customer service than many of the online banks.
Money Funds Yields as of July 30, 2007
Vanguard Prime Money Market Fund
5.25% yield, $3,000 minimum
McMorgan Principal Preservation
5.20% yield, $5,000 minimum
Harbor Money Market Fund
5.20% yield, $1,000 minimum
GE Money Market Fund
5.17% yield, $500 minimum
TIAA-CREF Money Market Fund
5.15% yield, $2,500 minimum
Fidelity Money Market Fund
5.13% yield, $25,000 minimum
* Yields quoted are the 7-day Effective Yields which factors in compounding of income.
More information about money funds is available here.
