Is there a mutual fund that invests in certificates of deposit returning that type of rate?

I am looking for a mutual fund that would reflect low risk deposits with returns that would be typical of certificates of deposit.

Why pay a management fee for the mutual fund instead of just getting a CD on your own? Or, buy t-bills via http://www.treasurydirect.gov instead?

I don't know of any.

a mutual fund that invests in CDs? CDs are about as safe as fort knox anyway, so why would you need to diversify it into a mutual fund? very confused by a persons motivation to do something like that...

yes, but unless you are 80 years old, there is truly no point. There are money market acocunts that yield 4-6% and are completely liquid. Rates arent guaranteed mind you, but your principle balance is.

Mutual funds can gather almost any instrument inside themselves, bonds, stocks, etc. If you want a more guaranteed rate in times of concern and worry, than a mutual fund with government bonds will yeild you rates similar to a CD, and be relatively steady.

My favorite fund family is American Funds. They only have 19 mutual funds, but they rank as the #1 family by Barrons/WSJ/DOW in terms of Total Returns over the last 10 years.

Email me if you have any questions, I am a Financial Advisor at a securities company in Orange County, California.

No, but there are money market funds. They invest in various short-term high-quality instruments (U.S. Treasury bills, high-grade commercial paper, etc.) The rate of return is in most cases higher than that on CDs (unless you get your CDs at bank with an extremely lean operations base), while the level of risk is comparable (money market funds are not FDIC insured, but they do have a substantial percentage of assets in government paper, and the rest is well diversified among high-grade commercial issuers).