A Qualifying Money Market Fund (QMMF) is a low-risk type of investment, and one of just four places permitted to hold client money.
When a financial company collects money from customers, it has to hold it either with:
A Central Bank
Α Credit Institution
A Bank authorised in a third country
Α Qualifying Money Market Fund (QMMF).
The low risk of a QMMF is driven by a few factors. The investments of a QMMF include mainly short-term government-issued or -guaranteed securities and short, fixed-term deposits from high-quality companies. In addition, Money Market Funds (MMFs) s need to have certain characteristics to be considered "Qualifying":
The MMF’s primary objective must be to preserve capital
The MMF has to follow strict rules around only making investments in high quality instruments to keep risk low
It must offer investors the ability to withdraw their money very quickly (i.e. same or next day)
Given these characteristics, QMMFs are commonly used by pension providers, insurance funds and other financial institutions to hold large amounts of customer deposits.
Plum is not a bank. Your Cash ISA funds will either be held with our banking partner Citibank plc or in one of Blackrock’s Qualified Money Market Funds (QMMF) that we use.