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February 20, 2011
CDs and Money Market Funds

CDs and Money market funds are both considered short term safe investment options. CDs offer a slightly higher yield than Treasury bills because of the slightly higher default risk for a bank but, overall, the likelihood that a large bank will go broke is pretty slim.

On the other hand, Money market mutual funds are a type of mutual fund consisting of high quality, short-term debt instruments such as Treasury bills and short term corporate IOUs. Like all mutual funds, money market mutual fund (MMMF) portfolios are professionally managed and a management fee is charged against fund assets to cover this expense.
 

CDs and Money market funds are both considered short term safe investment options. CDs offer a slightly higher yield than Treasury bills because of the slightly higher default risk for a bank but, overall, the likelihood that a large bank will go broke is pretty slim.