Money market funds are mutual funds that put their money into short-term, high-liquid products such as Treasury bills, certificates of deposit, and commercial paper. The product is developed with the focus of generating stability along with liquidity to support investors that look for money market funds as the next source to meet their short-term requirements.
These funds normally yield less than equity and debt funds but have very low risk. Here, the emphasis is on wealth preservation and liquidity rather than on maximum returns. Money market funds are ideal for a cash holder who needs an ultra-safe place to sit on his or her money temporarily without locking up funds for a long time.