Cash (or short-term securities as the folks with plenty to toss around say) comes in many forms.
Bank accounts - You know, checking and saving.
Bank CDs - You may buy in with a modest sum and hold a CD for months or years. When they mature, you get back your principal plus interest.
Treasury bills - The U.S. government issues these. You make a purchase with $10,000 or more, and you invest for one year or less. Principal and interest may come back to you at maturity.
Money market accounts - You can open a money market account at any brokerage firm, and you may put money in and take it out any time. You might get a slightly higher rate of return than a bank savings account. But, your money is not FDIC insured.
Money market funds - These are collections of highly liquid vehicles such as debt securities issued by banks, large corporations and governments. They deliver modest, fixed rates of return. You can buy in for a relatively small initial amount, and you can get your money out with one-day notice.
Lots of places to stash cash…banks…T-bills…brokerages…your shoe.
An investment in a money market account is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the account may strive to maintain a $1.00 net asset value per share, there is no assurance that it will be able to do so. While the account's investment objective includes the preservation of capital, it is possible to lose money by investing in the fund.
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