'Lock in higher yields through money market funds'

As interest rates fall, investing in money market funds is more rewarding than keeping money in savings or fixed deposits.

- Murthy Nagarajan, HEAD, FIXED INCOME, TATA MUTUAL FUND

Murthy Nagarajan, head, Fixed Income, Tata Mutual Fund, tells Saikat Neogi that it is smarter for investors to lock in higher yields through money market funds, as they offer both accrual income and capital gains. Excerpts:

As interest rates are likely to fall, should investors consider money market funds now? As the RBI is expected to cut the repo rate over the next three policy meetings, banks are likely to reduce deposit rates further. In this environment, it's smarter for investors to lock in higher yields through money market funds, as they offer both accrual income and capital gains. This makes them more rewarding than keeping money in savings or fixed deposits, which are subject to repricing.