Funds and trusts may confer additional benefits, such as lower minimum investment levels, diversification, and tax protection. Investors should pay close attention to fees and operating costs because of their diminishing effect on returns. T-bills are issued at a discount and mature at par or face value. Bids may be entered on either a competitive or noncompetitive basis. All noncompetitive bids are accepted by the Treasury, and buyers who enter these bids agree to pay the average price of all competitive bids that are accepted.
Commercial paper is secured only by the issuer s good name.
Commercial paper issuers are generally able to pay slightly less than the prime rate on their borrowings. Since Eurodollar deposits are liabilities of banks located in Europe or anywhere else outside the United States, disputes must be settled without reliance on the protections of the U.S. legal system. Because money market funds concentrate on very liquid short-term instruments, adverse interest rate moves are unlikely to affect the fund s share prices significantly. Short-term unit investment trusts are unmanaged and mature. Yields on existing units will not increase when market interest rates rise.