Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Money Market Account?
Old 09-23-2008, 07:23 PM   #1
Full time employment: Posting here.
Dog's Avatar
 
Join Date: Apr 2006
Posts: 782
Money Market Account?

Are you leaving your money in a money market account knowing that they are not FDIC insured? I'm thinking of moving my MM funds into my CU savings account. Is this overkill?
__________________

__________________
Dog is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-23-2008, 07:30 PM   #2
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,117
Quote:
Originally Posted by Dog View Post
Are you leaving your money in a money market account knowing that they are not FDIC insured?
Not FDIC insured, but Treasury Guaranteed* - at least for a while.

www.nytimes.com

*Provided the MMkt fund pays a fee to participate. Vanguard hasn't done so...at least not yet.
__________________

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 09-23-2008, 07:35 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
I have some emergency money in VMMXX. Standing pat...
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 09-23-2008, 07:37 PM   #4
Full time employment: Posting here.
Dog's Avatar
 
Join Date: Apr 2006
Posts: 782
I checked the Vanguard site and they did not submit any of their MM accounts for the treasury guarantee. I just don't want to kick myself later.
__________________
Dog is offline   Reply With Quote
Old 09-23-2008, 07:47 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
Bankers Acceptances 2.8%
Certificates of Deposit 28.3%
Commercial Paper 14.4%
Other 1.2%
U.S. Government & Agency 53.3%
Yankee/Foreign 0.0%
Total 100.0%

VMMXX holdings per VG website. Not too much funny money in there...
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 09-23-2008, 07:55 PM   #6
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,905
Most of my cash is in Vanguard's Admiral Treasure Money Market Fund (VUSXX). I have a little in Vanguard Prime Money Market Fund (VMMXX) and a little in an FDIC-insured bank account.

Don't forget that over the weekend it was decided that the federal guarantee of money market funds was ONLY for money already there. New money deposited in MM accounts after last Friday will not be guaranteed. This is to prevent a run on the banks, where FDIC insured savings accounts often pay lower interest than MM funds.

OK, where did I read that. Umm. If I find the link, I'll post it.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 09-23-2008, 08:24 PM   #7
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
All my cash is in Vanguard money market funds. I have no intention to move it. I trust Vanguard's conservative money management skills.
__________________
FIREd is offline   Reply With Quote
Old 09-23-2008, 08:34 PM   #8
Recycles dryer sheets
mark500's Avatar
 
Join Date: Feb 2006
Posts: 146
The Bond Buyer: The Daily Newspaper of Public Finance

I guess muni money market funds are also covered by the treasury guarantee.
__________________
The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of misery.

Winston Churchill
mark500 is offline   Reply With Quote
Old 09-23-2008, 10:45 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Quote:
Originally Posted by HFWR View Post
Not too much funny money in there...
Pretty much NO funny money in there.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Money Market Account
Old 09-24-2008, 01:45 AM   #10
Confused about dryer sheets
 
Join Date: Sep 2008
Posts: 1
Money Market Account

A Money Market Account is basically a premium account, or a high interest savings account. Also known as an MMA, a Money Market Account should not be mistaken for a Money Market Fund. A Money Market Fund is an investment strategy with larger returns than a premium savings account. A Money Market Account can be opened very simply at almost any bank.
-----------
Tanyaa
Internet marketing
__________________
tanyacatherine is offline   Reply With Quote
Old 09-24-2008, 01:52 AM   #11
Recycles dryer sheets
 
Join Date: Jul 2007
Posts: 346
Want2retire

I hope everything is back to normal after the storm. I live in Pennsylvania and we had some high winds from IKE that knocked the power out and that was bad enough I can't imagine what it must be like to go through a full blown hurricane.

Anyway I liked your thread on MM and I switched to Vanguard treasury after reading it.

Dog

I have been looking at online savings accounts to put some cash in. They are fdic insured and yield like 3%+ so I might set up some. Like ING or FNBO or HSBC or some other one.

Jim
__________________
summer2007 is offline   Reply With Quote
Old 09-24-2008, 11:06 AM   #12
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,905
Thank you, Jim. I hope that Vanguard's treasury MM fund works out for you.

It seems to me that we are each quite alone in making decisions in a time of financial crisis such as this, and have to do the best we can in preserving our own funds. My decisions could be completely wrong, and I am no expert at investing. Like others here I am putting my decisions and what I know or think I know "out there" for others to think about as they consider and make their own choices.

OK, given that caveat...

After searching for hours I finally found the reference I mentioned above. The link is here:

The Crisis and Your Pocketbook - washingtonpost.com

and here is an interesting exerpt that confirms some of what we have been talking about (emphases mine):

Quote:
Last week, the U.S. Treasury Department promised to insure the value of deposits in money-market mutual funds, much the same way that the Federal Deposit Insurance Corp. protects the first $100,000 in your bank account: Whatever you put in, the government now guarantees you'll get out.

However, the Treasury has since said that its umbrella is limited to deposits made before the close of business Sept. 19, the day the measure was announced. New accounts or money added to existing accounts will not be covered.

There's another catch: The guarantee is not automatic. Your money-market fund must pay a fee to participate in the program, and it's unclear which funds will join. The fee will probably be based on the amount of assets, although details are still being worked out, according to Treasury spokeswoman Jennifer Zuccarelli. The guarantee will last one year.

Money-market funds are operated by mutual fund companies. They are different from the money-market accounts offered by banks, which are federally insured and are advertised as a safe way to store money at higher interest rates than traditional savings accounts. Money-market funds are typically investments in short-term debt issued by large, stable institutions. That makes the funds low risk -- but not no risk.
I am not too worried about my money in Vanguard's Admiral Treasury Money Market Fund (VUSXX) since it is invested in treasuries which are backed by the federal government with or without any federal insurance.

It would be nice if I had more in Vanguard's Prime Money Market Fund (VMMXX) in order to get the higher interest rates, but anything moved into that fund would not qualify for the insurance. I seriously doubt that VMMXX will get in trouble, either, but erring on the overly cautious side I will leave my money in VUSXX for now.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 09-24-2008, 01:39 PM   #13
Recycles dryer sheets
 
Join Date: Jul 2008
Posts: 401
Quote:
Originally Posted by Want2retire View Post
Don't forget that over the weekend it was decided that the federal guarantee of money market funds was ONLY for money already there. New money deposited in MM accounts after last Friday will not be guaranteed.
Damn, I moved Prime to Treasury before then; wonder what that means
for me ? Nothing I guess, since you'all say Vanguard blew off the
guarantee, and Treasury is rock-solid anyhow (unless that Iranian
whack-job is right).
__________________
RustyShackleford is offline   Reply With Quote
Old 09-24-2008, 02:12 PM   #14
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,905
Quote:
Originally Posted by RustyShackleford View Post
Damn, I moved Prime to Treasury before then; wonder what that means
for me ? Nothing I guess, since you'all say Vanguard blew off the
guarantee, and Treasury is rock-solid anyhow (unless that Iranian
whack-job is right).
Yeah, I'd think you'll be fine (from what I've read, anyway). But keep reading and evaluating all you can since I am not one of our "financial whiz kids". I did the same as you, moving into Treasury before the Fannie Mae and Freddie Mac thing blew up, because Prime had a bunch of each at the time. So that's why most of my $$$ is in Treasury.

I think I'll head over to Vanguard's site and read whatever they might have there about the insurance and their plans. I haven't read about that yet except on the board.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 09-24-2008, 02:22 PM   #15
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,905
Here's Vanguard's statement:

https://personal.vanguard.com/us/Van...232008_ALL.jsp

Here's an exerpt: (emphasis mine)

Quote:
On Friday, the U.S. Department of Treasury announced a planto temporarily guarantee the account values of money market funds (taxable and tax-exempt) as of the close of business September 19. Important details—including program participation fees—have yet to be determined. As of today, Vanguard has not decided whether any of our money market funds will participate. We will continue to monitor the details of the program as they become available.
So, they might participate, or they might not.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 09-24-2008, 02:34 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Quote:
Originally Posted by Want2retire View Post
I did the same as you, moving into Treasury before the Fannie Mae and Freddie Mac thing blew up, because Prime had a bunch of each at the time. So that's why most of my $$$ is in Treasury.

I'm 99% sure that all their freddie/fannie paper matured months ago, and 95% sure they didnt buy any more. It also wasnt that much, and likely to end up getting paid.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 09-24-2008, 02:36 PM   #17
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,905
When I switched, I checked the most recent info available online about it and they still had it. It was not a huge percentage but it was enough that I didn't want to be in VMMXX, personally (and I'm 100% sure of that as opposed to your 95%, .

YMMV and obviously did. But anyway that was a while back. Once they had it. Now they don't. They're pretty slick doods!
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 09-24-2008, 02:46 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Quote:
Originally Posted by Want2retire View Post
When I switched, I checked the most recent info available online about it and they still had it.
Everything I can see said their last fannie/freddy debt matured in july and august. They'd have been pretty stupid to be buying it since then.

Got a pointer to what you've seen? Because I've got plenty in the prime mm and cant find anything in their current portfolio that looks even a bit pale.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 09-24-2008, 03:04 PM   #19
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,905
Bunny, you're right and I am sorry if I misled you - - naturally they have no fanny/freddie now. This was in early July. At the time, the most recent information available on their website said they did have it. So what the two of us are saying is consistent.

So anyway, you are right that they did get rid of their Fannie/Freddie. Those Vanguard guys are slick!
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 09-24-2008, 03:10 PM   #20
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,905
You know, the more I think of it, the more important the article quoted below may be to most readers (emphases mine).

The Crisis and Your Pocketbook - washingtonpost.com

Quote:
Last week, the U.S. Treasury Department promised to insure the value of deposits in money-market mutual funds, much the same way that the Federal Deposit Insurance Corp. protects the first $100,000 in your bank account: Whatever you put in, the government now guarantees you'll get out.

However, the Treasury has since said that its umbrella is limited to deposits made before the close of business Sept. 19, the day the measure was announced. New accounts or money added to existing accounts will not be covered.

There's another catch: The guarantee is not automatic. Your money-market fund must pay a fee to participate in the program, and it's unclear which funds will join. The fee will probably be based on the amount of assets, although details are still being worked out, according to Treasury spokeswoman Jennifer Zuccarelli. The guarantee will last one year.

Money-market funds are operated by mutual fund companies. They are different from the money-market accounts offered by banks, which are federally insured and are advertised as a safe way to store money at higher interest rates than traditional savings accounts. Money-market funds are typically investments in short-term debt issued by large, stable institutions. That makes the funds low risk -- but not no risk.
This is information that I haven't seen posted on the board before this thread, and I think it is important due to the run on money markets last week, and the fact that this September 19th deadline was imposed to prevent a possible run on the banks.

Of course, maybe y'all already knew all of this and are yawning.
__________________

__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Automatic payments from a money market (savings) account a FIRE and Money 4 04-07-2007 01:14 PM
Need to open a Money Market Account Hamlet FIRE and Money 5 02-13-2007 10:35 PM
Which Money Market Savings Account is doing best out there? xmanz3 Young Dreamers 3 12-13-2006 09:20 AM
Selecting a Money Market Account Intuit FIRE and Money 8 01-31-2006 05:07 PM
Best Money Market Account Available today? Cut-Throat FIRE and Money 31 09-03-2005 09:07 PM

 

 
All times are GMT -6. The time now is 11:16 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.