A distinction is usually made between standard money market funds and special money market funds.
The standard money market funds include the actual money market funds that only invest in securities on the money market. The so-called “money market-related funds” are also included. You invest both in money market paper and in fixed-income securities with short maturities.
Historical background of money market funds
Money market funds began in the United States in the 1970s. At that time, the interest that banking institutions were permitted to pay on deposits was limited. The money market funds thus developed as an alternative to conventional bank deposits. In addition to institutional customers, investors were also private customers. The funds themselves were unrestricted and available across the US.
In Europe, they first introduce money market funds in France. Government interest rate regulations on deposits also played a role here.