Question

Mutual funds pool deposits from investors to purchase securities. what is true about mutual funds

Answer 1

Mutual funds are a great way for investors to add security to their deposits. To elaborate Mutual funds are most commonly applied to so-called open-end investment companies, which are collective investment vehicles that are regulated and sold to the general public on a daily basis.

Answer 2

The answer is: Mutual funds are typically less safe than Certificates of Deposit

Certificates of deposits can only be offered by banks that acknowledged by the federal government. Mutual funds on the other hand could be created by any people/organizations even without clear expertise/experience.

Because of this, typically mutual funds can be considered to be less safe compared to Certificates of deposits

But, If you stick to mutual funds that created by well-established organizations, it would most likely be safe.