Money Market Mutual Funds
Money market mutual funds, which are completely liquid and readily accessible, consist of contributions from investors and produce short-term rates. You can buy into most of these funds with a minimum amount of $500. Finally, it is important to note that money market mutual funds are neither guaranteed nor insured, and a financial gain is not always the result of your investment.

Treasury Bills
Treasury bills (T-bills) are a short-term debt mechanism distributed by the government. They normally mature within three to twelve months after their issue date and carry a minimum face value of $10,000. You pay a discounted amount and then receive the difference between the face and discounted values upon maturity.

Treasury bills are not subject to local and state taxes, and they are relatively safe due to the support it receives from the U.S. government. Finally, if you wish to sell your T-bills in the secondary market, the funds will be subject to capital gain or loss.

Certificates of Deposit
Acquired through banks or brokerage firms, certificates of deposit (CDs) are insured by the government for a maximum amount of $100,000 and are regarded as a safe investment. Like many other investment instruments, certificates of deposit may entail certain expenses if you choose to withdraw funds from the CDs. CDs also maintain an active secondary market. If you need access to your money, you may sell the CD. Finally, if you wish to sell your CDs in the secondary market, the funds will be subject to principal gain or loss.

This information is presented to educate the reader and does not constitute professional tax and legal advice.

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