Is it worth investing my money in a money market fund?

As we have discussed many times, the money market fund is not in a position to hold our money for a long time, because its yields fall short of bank deposits. (Although the transaction tax now shades the picture slightly.)

But what it is: if you don’t need that amount for a couple of days or weeks, or you are looking for a used car and don’t know when to find the right one, you can put your money in here and earn interest daily. You can take it out at any time without loss of interest.

Current low interest rates and the brutal transaction taxes

Current low interest rates and the brutal transaction taxes

The big question remains: with the current low interest rates and the brutal transaction taxes and interest tax plus EHO, does it make sense to put in the money for a few days or a couple of weeks?

Well, putting it in a bank, if you want to take it out afterwards, it almost makes no sense. Only the transaction tax on withdrawals is 0.6%, with no upper limit, that is to say, the 10 million entry fee is 60 thousand HUF plus bank charges. At current interest rates, this amount of money is interest-bearing for almost 3 months. (I did not even pay for bank charges, and there will be no cashier costs for such an amount.)

But what if you already have money in a bank, how much do you gain if you transfer it to a money market fund?

With the continuously declining central bank base rate

bank

A money market fund is expected to yield 2.5-3.5% per annum. From this deduct the interest tax and if at least 80% of the fund is not in Hungarian government securities, then the EHO as well, these two items are 22% of the interest.

You often pay for the purchase and / or sale of a money market fund, as well as the cost of a securities account is usually 0.1-0.15% per annum, but at least X thousand forints per quarter.

I have made a calculator for you

bank

Which will fill you in and tell you what the expected benefits will be for the specified term. You enter the amount, the number of days, the expected return, the purchase and sale costs (if any), the transfer, money withdrawal costs (if any), and the cost of the securities account.

The calculator will determine how much you will gain over the term and decide if it is worth the money to transfer. (For example, $ 10 million will bring you about $ 4-5,000 in net per week, unless you need to transfer money to another bank.)

Here you will find the calculator, use it healthily.