Schwab Money Market is a cash management product that provides you with access to a range of money market funds. Schwab Money Market offers a variety of investment options and can be used for cash management strategies such as custody, temporary investments, or making payments on financial obligations.
Money funds designed to offer stability of capital, liquidity, and income.
Money funds are designed to offer stability of capital, liquidity and income. They are not FDIC insured but considered safe investments. Money funds can be used as a place to park money for short term investments or when you need to make a deposit that is protected by Federal Deposit Insurance Corporation (FDIC) insurance.
Money market mutual funds: A money market mutual fund is an investment company that pools your cash with that of other investors in order to invest it in low-risk securities such as CDs, Treasury bills and commercial paper. An advantage of investing in these types of accounts is that they usually pay dividends each month which help offset expenses incurred by the account holder (i.e., management fees).
Since these types of investments are “low risk” options – meaning they do not have high volatility – investors can earn higher interest rates than what might otherwise be available from other sources such as banks or credit unions (whereas bank statements show only one number per month). The drawback however is that if rates go up unexpectedly then so does the return from this type of investment; whereas with stocks there can be significant fluctuations without affecting their net worth value significantly because they do not rely solely on capital gains alone.
All investments carry risk, and since money market mutual funds are considered to be low-risk options, they don’t typically provide the same returns as other types of investments such as stocks or real estate.
A convenient way to access potentially higher yields on cash
Money funds are a convenient way to access potentially higher yields on cash. They are also good for short-term investing, with no commissions or fees to buy or sell.
Money funds come in many varieties to meet individual needs and goals. A money market fund pools investor money into one big account and invests it in short-term debt securities. Since the investments are very safe, their returns tend to be lower than other types of mutual funds but still competitive with other types of investments like certificates of deposit (CDs). Money market funds have no risk of losing principal because they invest strictly in U.S.-dollar-denominated securities such as treasury bills, banker’s acceptances and commercial paper issued by large corporations through prime brokers who specialize in this type of financing; however, they can lose value if interest rates rise significantly (and thus make these short term obligations less valuable).
Money market funds are also an excellent alternative to bank accounts, especially for those who don’t have enough money to merit the interest rates banks offer on CDs.
Access to a range of taxable and tax-exempt money funds
You can now choose from a range of taxable and tax-exempt money funds through Schwab. Taxable funds have a slightly higher yield than tax-exempt funds, and are not subject to state or local taxes. Schwab Money Funds offer high levels of diversification, with an average portfolio maturity that’s about three times longer than the U.S. Treasury benchmark for money market funds (three months). You can open a Schwab Money Fund with as little as $0* after 90 days; no transaction fees apply when you buy or sell your shares; there are no minimum deposit amounts on your account, and the cost of maintaining it is just 0.04% per year.
Schwab Funds also offer flexibility when it comes to making withdrawals—you won’t be charged any fees if you want to take out all your cash when you close an account, so long as your balance is above $1,000*. The minimum initial deposit requirement for opening a new taxable money market fund? Zero dollars.
With Schwab, you’ll have access to a wide range of money market funds that can help you meet your financial goals. Whether you want to invest in short-term fixed income securities or are looking for a vehicle that offers higher yield than traditional bank accounts, we have the right fund for your needs.
No transaction fees to buy or sell
The Schwab Money Market Fund offers the following features.
- No transaction fees to buy or sell. There are no transaction fees to buy or sell your money market fund shares. You can also make same-day in-kind exchanges of shares (or partial exchanges) without paying a fee.
- No minimum investment requirements to purchase or reinvest dividends/capital gains distributions into your account, but if you want to sell your money market fund before the end of the day, it must be at least $1 when you place an order through Schwab Bank—and there’s no commission for selling your money market fund shares with Schwab Bank.
. You can also sell your shares directly from your Schwab Money Market account online or by phone. No transaction fees for in-kind exchanges or partial exchanges (for example, if you want to buy $1,000 worth of shares but only have $500 available in cash), and no commission when selling your money market fund shares.
Minimum investment as low as $0*
Schwab maintains a $0 minimum investment requirement for Schwab Money market accounts.
In addition to having no transaction fees and no account service fees, you can also avoid paying interest on the amount of your balance that falls below $5,000 at other banks.
However, the interest rate on your money market account may be lower than you can earn with some other types of savings accounts. For example, in 2018 the average interest rate for a regular savings account was about 0.4% higher than for a money market account.
Hopefully, this article has helped you assess the key financial instruments offered by Schwab. From our research, we can say with confidence that your money is safe and secure with this financial organisation. That said, if you have any questions or concerns about investing in a Schwab Money Market account, please contact their Customer Service department at 800-435-4000.
