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A mutual fund that invests in very short-term debt. It is a security held at a brokerage — not a bank deposit, and not FDIC insured.
Why It Matters
Money market funds are widely used for cash sitting in a brokerage account, and they aim to hold a stable value — but aiming is not guaranteeing, and they carry no FDIC insurance. Brokerage accounts have separate SIPC protection, which covers a failed broker rather than a fund losing value. The naming overlap with money market accounts is the single most common source of confusion here.
Key Points
- An investment held at a brokerage, not a bank deposit.
- Not FDIC insured — SIPC covers broker failure, not investment losses.
- Aims for a stable value, but that is an objective rather than a guarantee.
Related Terms
Common Questions
A mutual fund that invests in very short-term debt. It is a security held at a brokerage — not a bank deposit, and not FDIC insured. Money market funds are widely used for cash sitting in a brokerage account, and they aim to hold a stable value — but aiming is not guaranteeing, and they carry no FDIC insurance. Brokerage accounts have separate SIPC protection, which covers a failed broker rather than a fund losing value.
Money market funds are widely used for cash sitting in a brokerage account, and they aim to hold a stable value — but aiming is not guaranteeing, and they carry no FDIC insurance. Brokerage accounts have separate SIPC protection, which covers a failed broker rather than a fund losing value. The naming overlap with money market accounts is the single most common source of confusion here.
An investment held at a brokerage, not a bank deposit.
Not FDIC insured — SIPC covers broker failure, not investment losses.
Aims for a stable value, but that is an objective rather than a guarantee.