Money Market Funds are mutual funds designed to provide competitive interest income on your liquid funds. Most money market funds earn interest daily, and some offer check-writing privileges. The yields on money market funds will fluctuate with market conditions. CDs are time-deposit investments issued by banks and also available through A.G. Edwards. The interest rate is fixed at the time of purchase and is paid either monthly or semiannually.
Banks typically charge a penalty for early withdrawal of their CDs.
If you liquidate your CD from A.G. Edwards, there is no withdrawal penalty, but your investment's value is subject to market fluctuations and may be worth more or less than your original investment. T-bills are sold at a discount from their face value and make no interest payments during their lives. Rather, at maturity, the investor receives the face value, with the difference between the purchase price and face value representing the interest earned on the investment. The second asset class is bonds. A bond is a loan that pays interest during a fixed term.