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seun adebisiIt is common practice for many Nigerians to stack up money “for the rainy season”, as they say, so many of us end up with a sizeable sum of money not in use at the moment.

The most common temptation would be to open an Access Bank savings account and save up in there. Just keep stacking up until you need the money for a specific purpose.

It could be that you are saving up to undertake a particular project or you are just a young person trying to invest small amounts of money and not sure where to start from.

If you fall into any of these categories, you may want to consider investing such funds in the money market mutual fund.

Here’s how it works…

The way a money market mutual fund works is that funds are pooled together from different subscribers, such funds are then invested in short term securities like Treasury bills, Federal Government Funds etc. The returns on such investments are repaid to the subscribers at the agreed interest rate which is usually above the inflation rate. These mutual funds are usually managed by experienced fund managers, the managers invest these pooled funds in a diverse mix of portfolios.

inflation money

Investing in mutual fund is a low risk venture so you can be sure that your money is safe, this is because fund managers usually invest these pooled funds in safe short-term securities.

High Returns: Some people have sizeable sums of money and rush to the bank to save it, ordinarily banks trade with such funds and the yield is usually between 3-4%, while investing in the money market can yield up to 12-15% yearly, depending on the financial institution. The money market mutual fund is also quite liquid, so, you can redeem or withdraw your funds at any time.

Managed by Professionals: These mutual funds are usually managed by experienced fund managers, the managers invest these pooled funds in a diverse mix of portfolios.

Low Risk: Investing in mutual fund is a low risk venture so you can be sure that your money is safe, this is because fund managers usually invest these pooled funds in safe short-term securities.

Protects You from Inflation: As prices rise, your purchasing power reduces, a way to shore up your income is to invest in a mutual fund that will yield return above the interest rate. Investing your funds in a mutual fund protects you from inflation especially if such funds are not currently in use. As prices rise, your purchasing power reduces, so a way to shore up your income is to invest in a mutual fund that will yield return above the interest rate.

It is pretty much easy and cheap to start investing in a mutual fund. You can invest for as low as N5,000 and keep topping up to enjoy the benefits. You can walk into any Access Bank branch for more information about mutual funds.

Protect yourself from inflation today by saving or investing your funds in the money market today?

Seun Adebisi

Twitter @satbee17

LinkedIn: Seun Adebisi

Read also: #Pecunia – Think In Terms Of The Dollar

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