MM Million Meaning, Examples, Conversion & Notations

mm definition finance

Today, MM remains the standard abbreviation for millions throughout the banking and accounting professions. In my experience analyzing data from top financial institutions, I estimate 90% or more use MM based on samples of hundreds of documents and reports. As a data analyst who works closely with the finance industry, I‘ve always been fascinated by the ubiquitous use of “MM” as an abbreviation for millions among banking and accounting professionals. It differs from the standard “k” and “M” abbreviations used in the metric system and most other sectors. I decided to take a deep dive into the origins and rationale behind “MM” to better understand this unique element of finance culture. Returns from these instruments are dependent on the applicable market interest rates, and therefore, the overall returns from the money market funds are also dependent on interest rates.

How are money market funds and mutual funds different?

However, they are not insured by the Federal Deposit Insurance Corporation (FDIC). The Community Bankers U.S. Government Money Market Fund was liquidated at $0.96 per share. This was the result of large losses that the fund incurred following a period of heavy investment in derivatives. You may want to use MMFs in addition to a larger diversified investment portfolio. Before you get started, think about your appetite for risk and also your liquidity needs https://www.bookstime.com/ for regular and upcoming expenses.

Usage of MM in Financial Statements

mm definition finance

They gained rapid popularity because they were an easy way for investors to purchase a pool of securities that, in general, offered better returns than those available from a standard interest-bearing bank account. Some money market funds are targeted to attract institutional money with a high minimum investment amount (often $1 million). Money market funds are covered by the SIPC but not by the FDIC’s federal deposit insurance, which covers https://www.instagram.com/bookstime_inc money market deposit accounts, online savings accounts, and certificates of deposit. MMFs are investments and not bank deposits or savings accounts – there are no guarantees of principal or insurance from any of the regional governments.

mm definition finance

What Is the Benefit of Using a Money Market Fund?

mm definition finance

The primary advantage of a money market fund is that it is a safe avenue for investing in secure and highly liquid, cash-equivalent, debt-based assets using smaller investment amounts. In the realm of mutual-fund-like investments, money market funds are characterized as low-risk, low-return investments. Under the provisions, a money fund mainly invests in the top-rated debt instruments, and they should have a maturity period under 13 months. The money market fund portfolio is required to maintain a weighted average maturity (WAM) period of 60 days or less. This WAM requirement means that the average maturity period of all the invested instruments—taken in proportion to their weights in the fund portfolio—should not be more than 60 days.

  • In the context of international reporting, the use of “MM” to denote millions plays a significant role in ensuring clarity and uniformity across diverse financial landscapes.
  • Like other mutual funds, money market funds sell shares to investors who can then earn income from the portfolios.
  • Finance regulations like MiFID II have pushed to standardize on SI prefixes like k and M instead of MM.
  • To prevent this from happening again, in 2010—in the aftermath of the 2008 financial crisis—the SEC issued new rules to better manage money market funds.

Money Market Funds Today

MM is the symbol used for representing the numbers in millions, whereas the mm definition finance symbol m is used as thousand in roman numbers and so mm is thousand multiplied by thousand, which is equal to 1 million. Large enterprises often present their financial statements and other reports with the figures in the millions, i.e., and they use ($ MM). A money market account, on the other hand, is a type of savings account that earns higher interest than a regular savings account. They are insured by the Federal Deposit Insurance Corporation (FDIC), and many come with the ability to write checks or use a debit card connected to an account. However, they may also come with restrictions, such as a limited number of times you can use or withdraw money from the account in a month.

mm definition finance

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