Guide: How to Buy a Money Market Fund
A money market fund is a conservative, simple savings option. It generally offers a Return based on the Interest rate environment, with high Liquidity and no commitment period.
- Reading time
- 4 minutes
A money market fundA mutual fund that invests in low-risk, short-term assets and serves as a liquid alternative to a bank deposit. is one of the most conservative and straightforward savings options available today. It generally offers a ReturnThe profit (or loss) from an investment over a certain period, usually expressed as a percentage of the original amount invested. based on the Interest rateThe "price of money" – the amount paid for the use of someone else’s money, as income to the depositor or as a cost to the borrower. environment, with high LiquidityThe speed and ease with which money can be withdrawn from an investment and converted into cash in a bank account without significant penalties. and no commitment period.
Although the purchase itself is relatively simple, many people do not know how to make it in practice. In this guide, we will explain step by step how to purchase a money market fund through a bank account, what information is important to check before purchasing, and what to know after the investment has been made.
What should you prepare in advance?
- Online bank account login details
- If you are not authorized to purchase SecuritiesA general term for a tradable financial asset (such as a share, bond, or unit in a fund) that represents a right to an asset or to profits. through the bank's website, contact the bank and ask them to enable this option for you.
Note: Leumi has a “virtual portfolio” that allows Securities purchases for practice purposes. This tutorial is conducted in Bank Leumi's virtual portfolio, but placing an actual order is done in almost the same way. In general, the interfaces and steps are very similar at other banks as well.
Step-by-step guide
Step 1: Choosing a money market fund
- Go to the list of money market funds on the “Financial Map” website.
- Filter the data by “year” to see the past year's Returns, sorted from highest to lowest.
- Choose one of the funds appearing at the top of the list.
- Make sure the management fees are not higher than the overall average.
- After choosing a fund with a high Return and reasonable management fees, click its link.
- Copy the fund number and write down its name.
Step 2: Log in to your personal account through the bank's website
Enter your username and password.
After logging in to the website, click “Securities” on the right.
Step 3: Selecting the fund on the bank's website
Paste or enter the fund number in the upper field, “Security search.”
After entering the number, the fund name will automatically appear below it. Make sure it matches the fund you selected. If everything matches, click the fund name.
Step 4: Verifying the fund details
The fund details will appear on the screen. Verify again that this is the fund you selected, then click the green “Buy” button.
Step 5: Purchase amount
Enter the amount you wish to purchase in the “Estimated cost” field, then click “Continue.”
Step 6: Continuing the purchase process
The system will display the “quantity in units” that can be purchased for the amount entered, and the estimated cost will be updated accordingly.
Step 7: Confirming the purchase
The system will display the purchase details and ask you to confirm them.
Step 8: Bank confirmation
The system will confirm the order.
Step 9: Orders and executions
Under “Orders and executions,” you can view the purchase order you entered.
The purchase order is executed only at the end of the trading day, so it can be canceled until the stock exchange's closing time (around 17:00 on a standard trading day).