tax-exempt money market fund

Tax-exempt money market fund

A money market fund that invests in short-term tax-exempt municipal securities.

Tax-Exempt Money Market Fund

A mutual fund that invests predominantly or exclusively in short-term municipal bonds. The returns on a short-term municipal bond fund derive from coupons on the municipal bonds, and are therefore tax exempt. The short-time frame of the bonds makes the fund quite liquid. As a result, these funds are beneficial for short term investors who wish to minimize their tax liability.

tax-exempt money market fund

An open-end investment company that invests in short-term tax-exempt securities. These funds usually pay relatively low current income (free of federal taxes) but are very liquid. They appeal to higher-income investors who seek a temporary investment. Also called short-term municipal bond fund.
References in periodicals archive ?
Tax-exempt money market funds have recently showed renewed strength after several years of lackluster yields in a prolonged low-interest-rate environment.
Prime and tax-exempt money market funds that are sold to institutional investors must price their shares and transactions using a "floating" net asset value (NAV), rather than the stable $1 NAV that such funds have long maintained.
Tax-exempt money market funds and other tax-advantaged investments, such as municipal bonds, may be attractive options for corporate cash reserves.
Bolton says that there are also national and single-state tax-exempt money market funds that can provide tax-free interest on cash you're parking for the short-term.
This study has shown that tax-exempt money market funds have replaced the banking sector as the primary market for short-term securities.
Similar rules are being studied for tax-exempt money market funds and a proposal may be forthcoming from the SEC in early 1992.