Tax Exempt Money Market
  • Tax exempt money market funds invest in municipal debt securities that offer tax advantages
  • Choosing no load money market funds means making your own investment decisions with no financial advice from a professional broker or advisor
  • Tax exempt money market mutual funds offer safety and stability for short term investing

Tax exempt money market funds are considered an excellent investment in many situations. These mutual funds invest in securities that are tax exempt, on a short term basis only. But are money market funds safe, or are they considered high risk? Tax exempt money market mutual funds are considered one of the safest and low risk investment options available. This does not mean that these funds can not lose money though, only that it is very unlikely. Money market mutual funds are ideal for money that will be needed in a short time but that is just laying around until needed. These funds are considered extremely liquid, which means that when you need the money it can be taken out without any delays or waiting periods. There is no need to wait to find a buyer for the investment, and while you are not using this capital it will earn a low yield for you. Because the risks are very low with no load money market funds the yield is not a high rate, but the lower yield is offset by the safety and security of your investment capital. Some tax exempt money market mutual funds may only invest in certain state obligations for a single state, while others may invest in a wide variety of state, city, and local government short term debt securities.

Tax exempt money market funds can be either no load money market funds or they can charge a load fee, depending on the funds you choose. Load fees are fees that are paid to a financial advisor or broker to help direct you to investment choices which are right for you. This is a big waste of money if you are comfortable with making your own decisions, or if you are willing to do the research and learn the facts you do not already know. When it comes to protecting and investing your capital, you are the only one who can make sure your investments are top priority. With a load fee, the broker will take the fee whether your investment income doubles or is reduced to half, and this can lead to conflicts between your financial security and the financial gain of the broker. In addition, many load funds may also pay a commission for new investments to the broker. This can lead to getting investment advice that works great for the broker but is not the best option for you. Instead, do your own research involving no load tax exempt money market mutual funds and choose the one that is right for your investment goals, strategies, and acceptable risk levels.

There are a number of tax exempt money market funds available to choose from, both those that charge a load fee and no load money market funds. One way that investors can be deceived is with funds that state they are no load but that charge a high 12b-1 marketing fee, part of which is paid as commissions to brokers. These are actually hidden load fees, and if the 1b1 marketing fee is more than one fourth of one percent of the net assets of the fund than it is a load fund, no matter what the name says. One of the true no load tax exempt money market funds is the Vanguard Tax-Exempt Money Market Fund, which trades under the symbol VMSXX. This fund has no load fees, and also does not charge any 12b-1 marketing fee at all. The expense percent for this fund is point one seven percent, so it is quite low, and the minimum investment requirement is only three thousand dollars.