Should I Use Money Market Accounts?

Money market securities are generally very safe investments which produce a relatively low rate of return. These accounts are most appropriate for temporary cash storage or a short-term investment fund. Money market investments always have a maturity of less than one year, and in many cases, less than 30 days. Certificates of deposits (CDs) and treasury bills are good examples of money market securities. These investments are usually purchased in denominations of at least $1,000.

Money market investments are considered to be very liquid, and consequently, are usually included with cash on an individual’s or a company’s balance sheet.  Their liquidity and relative safety make them an appropriate investment within an individual’s emergency fund. All investors should have an emergency fund consisting of between three and six months worth of expenses. This fund should only be used in emergency situations, such as a medical emergency or a loss of a job. An emergency fund should be established before any other type of investing.

About the author

Lon Jefferies, CFP®, MBA
Lon Jefferies, CFP®, MBA

Lon Jefferies is an investment advisor representative with Net Worth Advisory Group, a fee-only financial planning firm in Salt Lake City, Utah. He is a Certified Financial Planner (CFP®) and a member of the National Association of Personal Financial Advisors (NAPFA). He possesses an MBA and bachelor's degrees in Finance and Marketing from the University of Utah. Lon writes articles for local magazines such as Utah CEO, Business Connect and Utah Business Magazine, and he consistently contributes articles to online magazines such as FIGuide.com and FILife.com (by The Wall Street Journal). Additionally, Lon is an expert author at EzineArticles.com. Lon has been quoted nationally in publications such as the NY Times and Investment News.

Lon can be contacted at (801) 566-0740 or lon@networthadvice.com. Learn more about Net Worth Advisory Group at http://networthadvice.com and visit Lon's blog at http://www.utahfinancialadvisor.blogspot.com.

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Copyright 2014 FiGuide.com   About Us   Contact Us   Our Advisors       Login