Stocks and bonds, once the lords of the investing realm, endured large comedowns over the past year as interest rates ascended from the depths of near zero. But the rate escalation has been a big boon for money-market funds, long an afterthought investment, cubbyholes where people used to park spare cash temporarily while awaiting deployment in more promising places.
Today, money-market funds are the answer to the question of where to put your money that is safe—and that also gives investors yields in the vicinity of 4% to 5% yearly. That’s a lot richer than bank savings accounts, which remain historically stingy, usually well below 1%. Money funds, largely sponsored by such financial giants as Fidelity Investments and Charles Schwab, invest in short-term, low-risk debt. They don’t appreciate in value, as stock and bond funds do, or should do. Peace of mind and not-bad yields are your rewards.
