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Bank Savings
- FDIC Insurance
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Savings Accounts
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Money Market Accounts
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Money Market Mutual Funds
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Certificates of Deposit (Time
Deposits)
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Holiday Savings Clubs
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Vacation Savings Clubs
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Treasury Savings Bonds
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Money Market Mutual Funds
Money market mutual
funds are a pool of short-term, low risk securities, usually CD’s, U.S.
Treasury notes, and high quality short-term corporate debt. They are not
FDIC insured. Money market funds usually yield a slightly higher percentage
than bank sweep accounts. The small investors, meaning many young adults,
are being directed into low yielding sweep accounts and out of the higher
yielding money market mutual funds. Some firms have created tiered rate
structures that favor the larger accounts over the smaller accounts. It’s
important to ask your representative/broker your options in investing cash
balances. You need to direct your firm as to how to invest your cash
balances in a way that is appropriate for your individual needs.
The credit crisis has resulted in losses
to some money market mutual fund investors. Losses occur when share prices
drop below $1. Money market mutual funds are not risk free investments.
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