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I am looking for places from where I can buy low risk securities (like money market funds). Basically I want to invest my emergency fund in these kind of investments in order to keep up with inflation.

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Any brokerage should be able to offer these types of investments.

However, I have to warn you that low risk investments are not likely to keep up with inflation, especially with interest rates where they are now.

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    Seconded. Nearly zero-risk investments, such as money markets, savings accounts, and US bonds pretty much will never keep up with inflation. – Rick Goldstein Dec 29 '11 at 16:40
  • @Rick Goldstein - Very true, most earnings on investments are risk premiums in one way or another. In low risk investments that is primarily just opportunity cost risk. Without risk there is little reason for anyone to offer you a return. – JohnFx Dec 29 '11 at 19:42
  • While that's true, their job is not to keep up with inflation or earn you a decent sum of money. Their job is to provide you with cash without any further delay. – Lagerbaer Apr 3 '13 at 20:52
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Money markets & CD make so little now, it's hardly worth the effort of moving the money around.

There is another option that meets your requirement that it keep up with inflation. That would be I Savings Bonds. These federal government bonds that are like those old school savings bonds that grandparents used to buy their grandkids -- with the twist that the interest earned is in two parts - a fixed percentage interest, and a variable one that matches the official inflation rate.

That combined rate is set twice a year. Currently, it's 3.06% combined. That's all inflation. The fixed interest portion of I-bonds issued now is 0%.

These are designed for individuals, and can be bought direct from the government at http://www.treasurydirect.gov/indiv/indiv.htm .

Note you have to hold them for at least a year before you can redeem them, so you'd want to ease into them over time.

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  • While the inflation-linked rate accomplishes one objective, the minimum holding period of 1 year may render these inappropriate for an emergency fund. – Chris W. Rea Dec 30 '11 at 14:31
  • The minimum 1 year holding period does pose a problem, hence easing into the position. For a small emergency fund it wouldn't be worth it, but for a large one it would. – Patches Jan 3 '12 at 17:26

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