Money Market Account?

[Dog]

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?

 

[REWahoo]

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.

 

[HFWR]

I have some emergency money in VMMXX. Standing pat...

 

[Dog]

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.

 

[HFWR]

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...

 

[W2R]

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.

 

[FIREd]

All my cash is in Vanguard money market funds. I have no intention to move it. I trust Vanguard's conservative money management skills.

 

[mark500]

The Bond Buyer: The Daily Newspaper of Public Finance

I guess muni money market funds are also covered by the treasury guarantee.

 

[cute fuzzy bunny]

Not too much funny money in there...

Pretty much NO funny money in there.

 

[tanyacatherine]

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

 

[summer2007]

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

 

[W2R]

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):

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.

 

[RustyShackleford]

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).

 

[W2R]

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.

 

[W2R]

Here's Vanguard's statement:

https://personal.vanguard.com/us/Va...d_Views/news_ALL_mmguarantee_09232008_ALL.jsp

Here's an exerpt: (emphasis mine)

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.

 

[cute fuzzy bunny]

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.

 

[W2R]

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!

 

[cute fuzzy bunny]

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.

 

[W2R]

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!

 

[W2R]

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

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.

 

[frayne]

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?

FWIW, I moved a big chunk out of MM accounts this week to short term FDIC insured CDs. Call me chicken but I think it is prudent in the current climate. I know that the respective CEOs or presidents of these firms put out infomration as to the safety of said MM funds but I ain't trusting nobody in light of recent events. If and when things settle down, I'll go back into the MM accounts.

 

[Dog]

Frayne, I too moved most of what I had in my Vanguard MM account to a 3 month CD at my local CU. It will allow me to sleep at night.

 

[riskadverse]

I have a number of money market accounts, most of which are backed by FDIC or some brokerage equivalent, but with the rumors about shaky insurance companies starting to circulate, there is at least one which still worries me. Is there a list somewhere of the institutions who have signed on to the "Treasure Guaranty Program"? I will certainly call the company, but, I usually like to see these things in print versus a offhand reply from a telephone jockey.

 

[audreyh1]

I have a number of money market accounts, most of which are backed by FDIC or some brokerage equivalent..

Just FWIW, there isn't a "brokerage equivalent" for the FDIC - just the new, temporary Fed guarantee program.

 

[audreyh1]

I still have plenty of cash for short term needs in brokerage money market funds, and you can bet I'm paying attention to any Fed guarantee program and related timelines.

But I DID move a pretty big chunk into my bank account. This was mainly to make sure there were no interruptions in my short term cash flow.

Audrey