BiggerPockets

Money market funds, while uninsured, have always been deemed to be safe. The funds sought to maintain a $1 share price and only invested in the safest short-term instruments available. Yet Putnam Funds just closed a $12 billion Money Market Fund due to redemptions by major institutional investors. The fund has absolutely no exposure to the assets that experiencing turmoil yet the fund closed due to fears of a panic. The redemptions caused the shares to fall below the $1 mark.

Could the money market funds be the next wave of investor panic?

See article: http://news.yahoo.com/s/ap/20080918/ap_on_bi_st_ma_re/wall_street


:cool:

Does that mean that the money I have in money market accounts is NOT insured? If that is so, I should move it into standard savings accounts, right?
Ofgift

As Richard said, the ones at banks are insured but they aren't really money market accounts, they are hybrids.

True money market accounts are not insured, that is one reason why the rates are higher.

However, the fund managers use conservative investment vehicles so as to not "break the buck" or end up with a share price less than $1.

There is talk of a new entity being created to provide insurance for money market accounts like demand deposit accounts.

Personally, I am not draining my money market accounts. But, I have mine with very stable institutions.

Insured

What is there now is not anywhere near the insurance limits, but that brings up a question:
When my rental sells, it will be via a 1031. Since the agent will be holding MY money until used, in an account in my name, I believe, do I need to be sure the funds are not in BOA, and since the money will be over the insured limit, that it be split and kept in 2 separate banks?
thanks
ofgift