|Stable Value Vs Money Market Funds
There are many different types of investment opportunities that are available today. However, most investors are looking for something that carries low risk while ensuring regular returns. Stable value funds and money market funds are investment opportunities that endeavor to provide a stable investment opportunity to investors in lieu of a return. However, when you see stable value funds vs. money market funds, the former actually concentrates solely on retirement plans, while the latter is a type of mutual funds.
While stable value funds and money market funds are of high quality and offer short term investment opportunities, they are different from one another. For instance, stable value is handled by insurance companies. These companies guarantee an investor a fixed rate of interest for a particular period of time. During the investment period, the insurance company will invest the money in short term bonds of high quality and guarantee a specific return even if the interest rate falls. For this guarantee, the insurance company charges a fee.
In contrast, a money market fund can invest in a retirement plan or any other type of debt security. However, a money market fund does not guarantee the returns though its prime objective is to invest in short term investment with low risks.
Just like any other investment, both stable value funds and money market funds have a certain amount of risk. However, compared to other investment opportunities, the risks involved are lower when it comes to stable value funds and money market funds.
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