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Are MMFs the same as Cash?
Are MMFs the same as Cash?
Fay Benetatou avatar
Written by Fay Benetatou
Updated over a week ago

A money market fund is often seen as a cash equivalent because it invests in short-term, high-quality securities, such as government bonds.

For example, Blackrock, who support us with this service, lists the fund as one of their cash products.

However, it’s not exactly the same as holding cash.

While these bonds can move with market conditions, the aim of MMFs is to provide a more stable return.

The figure we quote for the rate is the 1-day yield, which is the previous day’s return, annualised.

We use this figure, as the return is paid daily to our customers.

The rate is variable and update duly the yield shown to customers on the same basis.

*Capital at risk.

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