According to trust fund regulations, what can trust money be invested in?

Trust money, as governed by regulations, is intended to be safeguarded and invested in a manner that prioritizes liquidity and security while generating a reasonable return. Short-term money-making instruments fit this criteria because they offer quick access to funds, thereby maintaining the ability to satisfy any imminent obligations or withdrawals of the trust. These instruments commonly include items like treasury bills, money market funds, or certificates of deposit, which are designed to enhance returns while ensuring that the funds can be readily accessed when needed.

Other options, such as real estate or long-term bonds, often involve greater risks and less liquidity. Real estate requires significant time and resources to manage effectively, which could lead to complications in fulfilling trust obligations promptly. Long-term bonds can provide returns but are not as liquid as short-term investments, which can be a crucial factor for trust funds that may need to repay beneficiaries or meet other financial commitments quickly. Mutual funds typically involve a range of assets, which may include stocks or other long-term investments, and may also introduce varying levels of risk and accessibility that are not conducive to trust fund requirements.