I'm just starting to research what to do with an inheritance I recently received in the form of assets in a brokerage account, and I've noticed that a lot of people seem to refer to "brokerage money market accounts" as "funds" and vice versa. Are such accounts really that different from a fund as far as interest rates are concerned? Should I consider transferring the cash assets to an actual money market fund until I decide on an investment strategy or leave them where they are (at least for now)?
If the amount of money is significant and you intend to leave it in a cash account of some type you should be concerned about the interest rate you are receiving. The answer to your question is as usual "it depends". All brokerage accounts will have some provision for the cash amount of the account. Some will put it or allow you to put it into a money market fund and others will leave it in a cash account similar to a bank savings account typically with a lower interest rate. There have been some that I have done business with that did not pay any interest. Another one actually put it into a bank savings or checking account that was linked to the brokerage account. For those that use a money market fund there may be a choice of what fund is used and depending upon the fund selected may be federal tax free.You need to know what your broker's procedures are for cash and what interest rate they are currently paying.Bob
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