Money Market Fund Question

[chevyhighrider]

Hey guys I would like to set aside some money, around $2000 worth, for an emergency fund. I have been trying to look into what is involved with purchasing a money market fund(MMF) and I have a few questions. First off I would like to set aside a little bit every week until I reach my $2000 goal. Would I have to just keep transfering my 50/wk into my TD account and then once I have the $2000, purchase the fund? or can I purchase the fund as I go? I am pretty sure that there is a transaction fee and minimum balance involved with every transaction. Also when I try to research Money Markets in TD's Research and Ideas tab nothing shows up on the list both with taxable and non-taxable. Also would it be better to buy a taxable or non-taxable fund? thanks Tom.

[Stocktrading101]

Originally Posted by chevyhighrider

Hey guys I would like to set aside some money, around $2000 worth, for an emergency fund. I have been trying to look into what is involved with purchasing a money market fund(MMF) and I have a few questions. First off I would like to set aside a little bit every week until I reach my $2000 goal. Would I have to just keep transfering my 50/wk into my TD account and then once I have the $2000, purchase the fund? or can I purchase the fund as I go? I am pretty sure that there is a transaction fee and minimum balance involved with every transaction. Also when I try to research Money Markets in TD's Research and Ideas tab nothing shows up on the list both with taxable and non-taxable. Also would it be better to buy a taxable or non-taxable fund? thanks Tom.

Hey Tom, welcome to the community . Being a TD Ameritrade client myself, I know I can atleast help you with one of these questions.

For the first question on whether you should just deposit $50 in per week, what you can do is setup automatic deposits through your account for free. They are electronic (ACH) transfers. Log in to your TD Ameritrade account then go,

Portfolio & Accounts --> Deposit/Withdraw --> Fill out the form.

You will have to add your bank and confirm it, but once you have that done it is easy breezy. The most often you can do auto transfers is every other week.

I do transfers all the time and do not get charged because I am not wiring money, I am doing it electronically through a pre-approved bank account. You can double clarify this but I am about 99% positive I have this right.

As for the second question, you are probably better off waiting until you have the full $2,000 saved before purchasing a money market fund. The only reason being is let's say they charge you the $9.99 per trade, well thats 20% of $50 every time you do it, so obviously not worth it.

And that last question, that I do not know. Sounds like something to do with a 401k or Roth IRA (when you are taxed). Perhaps googling these funds or calling TD Ameritrade directly would be your best bet here.

Hope that helps!