Think of it like this
You give money to the money market fund – the fund manager pools your money with money from other investors – the fund invests it in relatively short-term instruments such as:
Treasury bills
Commercial papers
Bank deposits
Certificates of deposit
Other short-term, interest-bearing instruments
The fund earns income from those investments and your unit value increases accordingly.
Example
Suppose you invest ₦1,000,000 in a money market fund.
If the fund earns, say, 15% over a year, before applicable fees/taxes and assuming the rate stayed around that level, your investment could grow to roughly:
₦1,000,000 → ₦1,150,000
You normally don’t have to personally buy Treasury bills or negotiate bank deposits. The fund manager does that for you.
But there’s an important difference
If you put ₦1 million into a normal bank savings account, you’re depositing money with the bank.
If you put ₦1 million into a money market mutual fund, you’re buying units of an investment fund. The fund’s assets are invested separately according to its mandate.
So even when the fund is offered through a bank, the bank and the fund are not necessarily the same thing.