1. What is CIC Money Market Fund?

The CIC Money Market Fund is a type of mutual fund that invests in high-quality, short-term debt instruments. It offers investors a relatively safe place to invest easily accessible cash-equivalent assets while earning some return.

2. How Does the Calculator Work?

The calculator uses the daily compounding formula:

Where:

• \( Principal \) — Initial investment amount
• \( Rate \) — Annual interest rate (as decimal)
• \( Time \) — Investment period in years

Explanation: The formula accounts for daily compounding of interest, which provides slightly better returns than simple annual compounding.

3. Importance of Daily Compounding

Details: Daily compounding means interest is calculated and added to the principal every day, allowing your investment to grow slightly faster than with annual compounding.

4. Using the Calculator

Tips: Enter the principal amount in dollars, annual interest rate as a percentage (e.g., 2.5 for 2.5%), and investment period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How does this differ from regular savings accounts?
A: Money market funds typically offer higher yields than regular savings accounts while maintaining high liquidity.

Q2: What is the typical return rate for MMFs?
A: Rates vary but are generally higher than savings accounts, often in the 1-3% range depending on market conditions.

Q3: Are there risks with money market funds?
A: While very low risk, they are not FDIC insured like bank accounts, though they aim to maintain a stable $1 per share value.

Q4: How liquid are these investments?
A: Very liquid - most allow withdrawals within 1-2 business days, though some may have minimum holding periods.

Q5: Are there fees associated with MMFs?
A: Most charge small management fees (expense ratios), typically between 0.1% to 0.5% annually.