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Author: foobar73 Big red star, 1000 posts Feste Award Nominee! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35400  
Subject: Re: MMF or Bond Fund? Date: 7/10/2003 11:43 PM
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Am I right in my reasoning that MMF's interest rates are so low right now, that it seems that I might get a better interest rate in the bond fund? Also, I'm not sure if the bond fund is as liquid as the money market account.

You will likely obtain slightly better yields in the bond fund, but keep in mind that higher yields always come with higher risks. In this case, should general interest rates rise, you will likely lose some of your principal when it comes time to cash in the fund a year from now. You will have to decide whether you can accept such risk or not.

Bond funds are usually not as liquid as money markets, in that most bond funds do not offer such features as check writing, but you should still be able to sell such funds and receive the money in a matter of days.
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