A money market fund is a low-risk mutual fund that invests in short-term, safe instruments, aiming to protect your money while paying a modest return close to prevailing interest rates.

It's where you park cash you may need soon, or the safe portion of a portfolio. Returns are lower than equity funds but far steadier, with very little volatility. In a high-rate environment, money market funds can pay attractive yields.

In Pakistan: offered by most AMCs and popular for emergency funds.

Example: a money market fund might pay around 10-12% in today's high-rate environment, with barely any ups and downs.

Don't confuse it with: an equity fund — higher risk and higher potential return.

Related terms: Mutual fund · NAV · AMC Where you'll meet this: Mutual funds vs stocks · Saving vs investing