For extremely short-term investments, many may consider repos. Repos, or repurchase agreements, are securities that are considered overnight borrowing in many circumstances. They can be longer, but are typically anywhere from overnight to thirty days of investment. They are low risk due to being backed by the government, and come in two forms: reverse repo and term repo.
As you have learned, there are various ways to invest in money market securities Whether you’re considering bonds, Eurodollars, repos or certificates of deposit, you will be able to find an investment that works best for you. Knowing the risks associated with each option–as well as the rewards–will allow you the opportunity to make an informed decision on the yield, maturity, and amount invested in each money market security. Considering diversifying your portfolio is smart for long-term investing for retirement, savings, or other financial stability, and money market securities are the perfect way to incorporate short-term investing into your financial plans.