Money market mutual funds present a suitable place for cash reservations when a depositor is not really ready to make an investment or is expecting a nearby term cash sum for a non-investment purpose. Money market mutual funds also offer essential safety and liquidity. This means the depositors will have an anticipated sum of cash at the moment when they need it.

When an investor invests mutual funds from a single fund company, he may sometimes want to transfer the assets from one fund to another. However, if the investor wants to sell a fund before making a decision on another fund to buy, a money market mutual fund is often offered by the same mutual fund company may be an excellent place to keep the progress of sale. Then, at a suitable time, the depositor may exchange his money market mutual fund property for shares of the other funds in the fund family.

To help their clients, brokerage firms often use these mutual funds to offer cash managing services. Placing a client's hidden cash into this fund, the client can gain an extra fraction of point in the annual returns which are earned by other investments. These mutual funds are considered to offer features that are especially suited to the needs of small depositors. The minimum initial investment is generally in the range from $500 to $5,000.

You can purchase these mutual funds from the mutual fund companies or brokers, which can be just as you purchase a stock or equity mutual. Some banks also sell these mutual funds as investment advisers do. Some people even have their own proprietary funds that offer money market investment chances. All these should not be confused with money market accounts, which help you in earning interest in your saving account. 

These mutual funds also offer some easy withdrawal features that are more naturally linked with bank or organization accounts. For example, if an investor has to withdraw his amount through checks, a minimum amount usually should be $500 per check. In this case, if the investor is not interested to write a check, he has the facility to redeem his shares by requesting payment by mail or through wire transfer directly to his bank account. Regarding mutual funds, it has money market security or a mixture of securities across a wide range, like, U.S. Treasury securities, government sponsored enterprises securities etc.
 
Another main classification of these mutual funds relates to its taxable or tax-exempt status. Taxable funds can be invested in securities such as Treasury bills and commercial document, where interest of the income is subject to national taxation. Tax-exempt funds are invested entirely in securities which are distributed by state and local governments which are exempted from national taxation. Tax-exempt funds generally attract investors, who are in higher federal tax payer category and seek tax savings on the income generated by them.

Therefore, money market mutual funds are the safest and most liquid financial medium which is generally available. Furthermore, these funds require humble initial investment and offer simple dealings for withdrawal of the funds by check or wire transfer to a bank account. And last but not the least, if you choose certain tax-exempt money market funds, you may also enjoy relief from federal/national, state or even local taxation.