Taxable Money Market

Most money market funds are taxable. Any income earned by an investor... Most money market funds are taxable. Any income earned by an investor is generally subject to state or federal taxes. As a result, when comparing the return from a taxable fund with a tax-free fund, it’s necessary to adjust for any taxes that will have to be paid. Taxable money market funds invest in very short-term securities (often less than 60 days) that are issued by governments, government-sponsored enterprises, and investment-grade corporations. These funds are very low risk, and ideal for investors who want to park some money in a safe place for a short period of time. Taxable money market funds tend to offer stable interest income, however the income is usually lower than other risky fixed-income securities. Last Updated: 12/23/2024 View more View less

Most money market funds are taxable. Any income earned by an investor is generally subject to state or federal taxes. As a result, when comparing the return from a taxable fund with a... Most money market funds are taxable. Any income earned by an investor is generally subject to state or federal taxes. As a result, when comparing the return from a taxable fund with a tax-free fund, it’s necessary to adjust for any taxes that will have to be paid. Taxable money market funds invest in very short-term securities (often less than 60 days) that are issued by governments, government-sponsored enterprises, and investment-grade corporations. These funds are very low risk, and ideal for investors who want to park some money in a safe place for a short period of time. Taxable money market funds tend to offer stable interest income, however the income is usually lower than other risky fixed-income securities. Last Updated: 12/23/2024 View more View less