Q: -What are your thoughts on these money market funds. I'm looking for a place to park some cash and gain a yield for the short term.
Are they taxed as dividend income or interest?
Any thoughts on timing entry and exit?
Thanks
Are they taxed as dividend income or interest?
Any thoughts on timing entry and exit?
Thanks
5i Research Answer:
For short-term basis, we think these are great vehicles to park some cash in, especially considering the ease and liquidity they provide compared to other money market options.
These are taxed as interest income, meaning 100% of the income is eligible to be taxed.
There is not a lot of timing that can be done here. Variability of prices is very low as income is paid out. If one really wants to, they can take a closer look to NAV, and buy based on its action (which is not huge shifts).