How Does a Money Market Account Differ From a Mutual Fund?
Investments in a Money Market Account and a Mutual Fund A money market account and a mutual fund are completely different types of investments. Money market accounts are considered “cash” investments. A financial institution pays you interest on the money in a money market account for the privilege of using it for the institution’s investments. This includes loaning money to others. A mutual fund primarily buys shares in stocks and bonds. You own shares in these investments until you decide to sell part or all of your mutual fund. Buying Shares in a Money Market Account and a Mutual Fund When you buy shares in a money market account you get one share for each dollar you invest. Interest is then paid on the number of shares you own. When you buy shares in a mutual fund, you get a number of shares based on the share price that day. The share prices fluctuates daily so you will get a different number of shares on different days you invest in a mutual fund. Profiting from a Money Market Ac
