Money Markets
Managing Cash with Confidence and Control
Money market instruments provide a flexible means of managing liquidity while maintaining low exposure to market volatility. Originally developed for institutional use, they’ve become a trusted option for individual investors seeking short-duration, high-credit-quality solutions for capital preservation and short-term planning.
Understanding the Money Market Landscape
Despite the name, money markets aren’t a location—they’re a network of borrowers and lenders that include corporations, financial institutions, governments and investors. These short-term transactions are typically made through instruments known for their safety and liquidity, such as:
- Commercial Paper
- Certificates of Deposit (CDs)
- Repurchase Agreements (Repos)
- Treasury Bills (T-Bills)
- Bankers’ Acceptances
These instruments are valued for their short maturities and high credit quality, making them ideal for conservative portfolio strategies.
Why Consider Money Market Investments?
- Preserve Capital: Short maturities reduce exposure to interest rate fluctuations
- Enhance Liquidity: Assets can often be converted to cash with minimal delay
- Balance Risk: Acts as a stabilizing component alongside more volatile investments
- Optimize Idle Cash: May offer better yields than traditional savings accounts
Investors often use money market holdings as a short-term solution while evaluating longer-term investment opportunities.
How Are Rates Determined?
Interest rates on money market instruments were once commonly linked to LIBOR. Today, most have transitioned to SOFR (Secured Overnight Financing Rate) or other alternative benchmarks. These reference rates help establish pricing and yield expectations in both institutional and retail markets.
What to Know Before You Invest
- Instrument Types Vary: Institutional instruments, money market funds, and cash-equivalent vehicles differ in access, structure, and return
- Rate Sensitivity: Yields may rise or fall slightly with changes in interest rates
- Strategic Use: Ideal for short-term needs, reserve allocations, or transitioning capital
Put Your Cash to Work—Strategically
If you’re looking for ways to preserve capital, boost liquidity or manage cash between longer-term decisions, our specialists can help you identify the right fit.