What is the difference between a bond fund and a money market fund.?
Question by Vic D. Dik: What is the difference between a bond fund and a money market fund.?
Are savings/time deposits considered as money market instruments too?
Answer by AvidRdr
A bond fund is a collective investment scheme that invests in bonds and other debt securities. Bond funds yield monthly dividends that include interest payments on the fund’s underlying securities plus any capital appreciation in the prices of the portfolio’s bonds. Bond funds tend to pay higher dividends than CDs and money market accounts, and they generally pay out dividends more frequently and regularly than individual bonds.
The money market is the global financial market for short-term borrowing and lending. The money market consists of financial institutions and dealers in money or credit who wish to either borrow or lend. Participants borrow and lend for short periods of time, typically up to thirteen months.
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