So money markets are mutual funds, investing typically in short term debt as they lend and borrow from each other.. Sometimes overnight.. The portfolio managers don't want to take lots of interest rate risk. Money markets are $1 a share, never to break under that, or else. Money markets are by nature very safe mutual funds, but they aren't risk free. They're liquid every day, and the interest rate paid can move around. CDs aren't as liquid and pay a steady percentage that doesn't change once bought. If you want your money before maturity, you'll pay a fee to get it.