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Is Your Credit Union a Part of the Shared Branch Network?More Details About the Treasury's Money Market Fund Guarantee Program
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POSTED ON BY Ken Tumin
This Bankrate article has a good overview of how the US Treasury's Temporary Guarantee Program for Money Market Funds is going to work. Almost all MMF families including Fidelity and Vanguard have decided to participate in the program. The Treasury first announced this program last month after a major MMF broke the buck.
The article gives some detailed examples of how the guarantee will work that goes beyond what the Treasury described. It's important to note that the program only guarantees the money you had in a MMF on 9/19/2008. It's also important to note that the program is only temporary. Treasury will review the program after the initial 3 months and will decide if it should be extended until 9/19/2009.
Make sure you don't confuse money market funds with money market accounts. A money market account is basically the same as a savings account which is FDIC-insured and offered by banks. A money market fund is a mutual fund holding a collection of short-term debt investments, and it is not FDIC insured.
The article gives some detailed examples of how the guarantee will work that goes beyond what the Treasury described. It's important to note that the program only guarantees the money you had in a MMF on 9/19/2008. It's also important to note that the program is only temporary. Treasury will review the program after the initial 3 months and will decide if it should be extended until 9/19/2009.
Make sure you don't confuse money market funds with money market accounts. A money market account is basically the same as a savings account which is FDIC-insured and offered by banks. A money market fund is a mutual fund holding a collection of short-term debt investments, and it is not FDIC insured.
