1) depends on fund. But at today's rates who'd "invest" for a day unless you were a bank w $ millions. Some funds or brokerages may have imposed amount or time restrictions due to cost of enrolling a new fund-owner.
2) most distribute monthly, usually in form of additional units.
3) there are risks in extreme circumstances. Last year value of some US MMFs fell below par. Because of bankruptcies or total illiquidity in a significant portion of the short-term paper in which such a negative-value fund had invested. Don't believe this happened in canada. Most MMFs have sufficient diversification that this would not happen, ordinarily speaking.
4) almost impossible to sell at a gain. MMFs remain at a fixed price - usually $10 - & pay interest once a month. They're designed to never rise above such fixed price. If you happen to cash out in middle of a month, fund will usually pay pro-rated amount.
5) oh oh. There are gigantic differences between stashing cash in a MMF & "buying shares of a company." Not even apples & oranges. More like apples & locomotives. Libraries are full of books about common shares, preferred shares, bonds, mutual funds, etc. Speed thee to em.
6) i have really not heard of any MMF paying 1-2% most are paying much less. You can easily obtain 1-2% from an online bank such as ING or ICICI and you'd have 100% insurance from the CDIC to boot, which a MMF does not have. There's an old hobo now on the block all dressed up as a pink-cheeked fresh-faced new kid. He's old GMAC, but he's now capering around as Ally and offering cash-ready accounts at 2% that are said to be CDIC insured. How they got that insurance beats me, but i think maybe they latched onto it when they bought another trust company few months ago. I don't have an Ally account and i'm not against them ... really ... but i'd look exceptionally hard at their recent history & at their financial structure before dumping any cash their way. That extra fractional % is not worth potential grief imo.
