Personal Finance Term
Money Market Fund
A low-risk fund that invests in very short-term, high-quality deposits and instruments, aiming to give returns slightly above a savings account while keeping your money easy to access. It is often used as a parking spot for cash.
A money market fund holds short-term, low-risk assets such as bank deposits and short-dated instruments, so its value is relatively stable and it usually pays more than a basic savings account. In Malaysia these funds are offered by unit trust and robo-advisor providers, often with no lock-in and quick redemption, which makes them a popular home for an emergency fund or for cash you want to keep liquid but not idle.
Money market funds are not bank deposits, so they are not covered by PIDM, and although they are considered low-risk, their returns are not guaranteed and can drift with prevailing rates. They suit short-term goals and cash buffers rather than long-term growth, since over many years their modest returns will lag shares and other growth assets. The sensible use is as a slightly higher-yielding, accessible alternative to leaving large balances in a plain savings account.