Gardan,
A deposit account, same as your normal bank account that you do your shopping from. Some will have a nominal interest rate, some won't.
A Money Market account, generally known as SWEEPS in the US are Treasury Bills that are bought as a means to increase the nominal return on cash not currently being invested. They do not carry an interest rate, they are sold at a discount from PAR, thus are equivelent of Zero's or strips.
The financial pages of most major newspapers will carry the information.
From Left to Right;
The Maturity date of the bill
The days to maturity
bid/ask spread
change in price
yield
The answer to your question therefore is that the deposit account carries lower risk than the money market account.
Cheers d998
A deposit account, same as your normal bank account that you do your shopping from. Some will have a nominal interest rate, some won't.
A Money Market account, generally known as SWEEPS in the US are Treasury Bills that are bought as a means to increase the nominal return on cash not currently being invested. They do not carry an interest rate, they are sold at a discount from PAR, thus are equivelent of Zero's or strips.
The financial pages of most major newspapers will carry the information.
From Left to Right;
The Maturity date of the bill
The days to maturity
bid/ask spread
change in price
yield
The answer to your question therefore is that the deposit account carries lower risk than the money market account.
Cheers d998
peterpr
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Gardan said:
Re GARDAN's post - Position in UK not quite the same as US.
A 'Money Market' deposit carries no more real risk than a retail deposit with the same bank. The bank will quote you a fixed rate for a fixed period based on LIBOR rates and it would take the collapse of the bank itself for your deposit or interest to be compromised. You ought to get a slightly higher rate than with a retail deposit. In practice I have found any such differential to be minimal to negative though, AND - you pay tax on ALL the interest. MM deposits are very simple convenient and easy for shuffling large wads of cash around whilst earning a bit of interest though - or so I have found. If you need some or all of the cash back during the deposit period, there is usually a small penalty + forfeit of some interest.
