In 1971, Bruce R. Bent and Henry B. R. Brown established the first money market fund. It was named the Reserve Fund and was offered to investors who were interested in preserving their cash and earning a small rate of return. Several more funds were shortly set up and the market grew significantly over the next few years. Money market funds are credited with popularizing mutual funds in general, which until that time, were not widely utilized.
Mutual funds continue to be among the most popular investing tools for both individual and professional investors who seek to beat the market or simply access a broad swath of investments rather than purchase stocks or bonds individually. Unlike stocks or exchange-traded funds, mutual funds trade just once per day, and many investors own them as part of a defined contribution retirement plan such as a 401(k) or an individual retirement account, known as an IRA. The price of a mutual fund share is known as the fund's net asset value, or NAV.
While the country was once home to the world’s most active cryptocurrency exchanges, authorities banned the venues last year and have since moved to block access to platforms that offer exchange-like services. — Fortune, "China Is Said to be Cracking Down on a Cryptocurrency Loophole," 28 Feb. 2018 Bitcoin, however, has become the cryptocurrency standard operating much like U.S. dollar would operate in public currency markets, but in the crypto realm. — Michael C. Dealoia, cleveland.com, "Cleveland-area entrepreneurs are pouring resources into new-currency technolgoy: Tech Czar Talk," 25 Feb. 2018 Some companies, such as KODAK, have promoted cryptocurrency investments in hopes of reviving their flagging businesses. — Mike Rogoway, OregonLive.com, "SEC suspends trading in companies run by former Oregon football star over cryptocurrency 'concerns'," 16 Feb. 2018
These changes require prime institutional money market funds to “float their NAV” and no longer maintain a stable price. The regulations also provide non-government money market fund boards with new tools to address runs. Retail and U.S. government money market funds were allowed to maintain the stable $1 per share policy. These reforms took effect in 2016.
In 2008, following the bankruptcy of Lehman Brothers, the venerable Reserve Primary Fund broke the buck: It held millions of Lehman's debt obligations, and panicked redemptions by its investors caused its NAV to fall to 97 cents per share. The pullout of money caused the Reserve Primary Fund to close and triggered mayhem throughout the money markets.
When comparing money market mutual funds a few patterns arose. First, when it comes to expense ratios, or the annual fees you’ll pay to own the funds, 0.25% is a threshold that separates the top and bottom half of the money market mutual funds in my short list. When it comes to yields, 2.1% is a defining 7-Day Yield threshold. For YTD yields, 1.4% is a benchmark that separates the pack.
Litecoin was one of the first cryptocurrencies after Bitcoin and tagged as the silver to the digital gold bitcoin. Faster than bitcoin, with a larger amount of token and a new mining algorithm, Litecoin was a real innovation, perfectly tailored to be the smaller brother of bitcoin. “It facilitated the emerge of several other cryptocurrencies which used its codebase but made it, even more, lighter“. Examples are Dogecoin or Feathercoin.
Opening a money market is as easy as choosing which bank and account is right for you. Some money market accounts don’t have a minimum opening balance requirement, so you won’t have to worry about keeping a certain amount in the account or incurring a maintenance fee. Compare the top APY accounts with the minimum balance that you’re comfortable with to make the best decision for your saving needs.
Ultrashort bond funds are mutual funds, similar to money market funds, that, as the name implies, invest in bonds with extremely short maturities. Unlike money market funds, however, there are no restrictions on the quality of the investments they hold. Instead, ultrashort bond funds typically invest in riskier securities in order to increase their return. Since these high-risk securities can experience large swings in price or even default, ultrashort bond funds, unlike money market funds, do not seek to maintain a stable $1.00 NAV and may lose money or dip below the $1.00 mark in the short term. Finally, because they invest in lower quality securities, ultrashort bond funds are more susceptible to adverse market conditions such as those brought on by the financial crisis of 2007–2010.
Government Normally at least 99.5% of the fund’s total assets are invested in cash, U.S. government securities and/or repurchase agreements that are collateralized fully (i.e., collateralized by cash or government securities)—including at least 80% in U.S. government securities and repurchase agreements for those securities. Certain issuers of U.S. government securities (e.g., “Government-Sponsored Enterprises” such as Fannie Mae, Freddie Mac, and the Federal Home Loan Banks) are sponsored or chartered by Congress, but their securities are neither issued by nor guaranteed by the U.S. Treasury.
Perks: The State Farm Bank money market savings account has an ATM card available. When used for ATM withdrawals, there is no fee for withdrawals at State Farm Bank-owned ATMs, and accounts are rebated up to $10 per statement cycle when a non-State Farm Bank-owned ATM is used – if a direct deposit hasn’t been set up. With a direct deposit, there are unlimited ATM surcharge rebates when ATMs not owned by the bank are used. Limitations apply to this. For example, the direct deposit needs to occur during the statement cycle. Also, if the account is closed prior to the statement cycle ending, you won’t receive the ATM fee rebate.
While cryptocurrencies are digital currencies that are managed through advanced encryption techniques, many governments have taken a cautious approach toward them, fearing their lack of central control and the effects they could have on financial security. Regulators in several countries have warned against cryptocurrency and some have taken concrete regulatory measures to dissuade users. Additionally, many banks do not offer services for cryptocurrencies and can refuse to offer services to virtual-currency companies. Gareth Murphy, a senior central banking officer has stated "widespread use [of cryptocurrency] would also make it more difficult for statistical agencies to gather data on economic activity, which are used by governments to steer the economy". He cautioned that virtual currencies pose a new challenge to central banks' control over the important functions of monetary and exchange rate policy. While traditional financial products have strong consumer protections in place, there is no intermediary with the power to limit consumer losses if bitcoins are lost or stolen. One of the features cryptocurrency lacks in comparison to credit cards, for example, is consumer protection against fraud, such as chargebacks.
Perks: One of the biggest perks you'll find with TIAA Bank is its "Yield Pledge," which maintains that its yield pledge money market account rate will always be competitive and in the top 5 percent. Its money market account also has no monthly fee, allows for mobile check deposits and is IRA-eligible. As long as you keep at least $5,000 in your yield pledge money market account, TIAA Bank will reimburse all ATM fees charged by other banks. Regardless of your balance, you’ll be reimbursed up to $15 for ATM fees incurred by using non-TIAA Bank ATMs.
Cryptocurrencies have been compared to Ponzi schemes, pyramid schemes and economic bubbles, such as housing market bubbles. Howard Marks of Oaktree Capital Management stated in 2017 that digital currencies were "nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it", and compared them to the tulip mania (1637), South Sea Bubble (1720), and dot-com bubble (1999). The New Yorker has explained the debate based on interviews with blockchain founders in an article about the “argument over whether Bitcoin, Ethereum, and the blockchain are transforming the world”.
On 21 November 2017, the Tether cryptocurrency announced they were hacked, losing $31 million in USDT from their primary wallet. The company has 'tagged' the stolen currency, hoping to 'lock' them in the hacker's wallet (making them unspendable). Tether indicates that it is building a new core for its primary wallet in response to the attack in order to prevent the stolen coins from being used.
If this sounds similar to banks’ high-yield savings accounts or money market accounts, it is. The largest difference lies in the ability for yields on money market mutual funds to rise proportionately with interest rates. For example, as interest rates have risen, the yields on most bank money market accounts (which are set by the banks themselves) have stayed relatively flat, while money market mutual fund yields have increased.