About AARP Financial Money Market Savings Accounts
Financial planning is perhaps the most important part of anyone's plans for the future. AARP offers a money market fund to its member who are either nearing retirement, or are more interested in a conservative investment for their retirement planning goals.
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History
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AARP was initially founded in 1947 as the National Retired Teachers Association by Dr. Ethel Percy Andrus, a retired high school principal. It became the American Association of Retired Persons in 1958 and expanded its pool of members. AARP functions as a nonpartisan advocacy group for its members who, contrary to popular belief, do not have to be retired in order to join. In addition to lobbying state and federal governments, AARP also offers benefits such as financial planning through its money market fund.
Features
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Money market funds are a method of investing that is considered very low risk and very conservative. In essence, a money market purchases debts that are going to mature, or "pay off," in a very short time period, usually in about 1 year. Because the debts invested in by money market managers are among the most highly rated, that is, they are the most likely to be paid off in time, they offer low interest rates because the maturation is almost guaranteed.
Money market funds are used for retirement planning when the investor is retiring soon or wants low-risk return for her money. Sometimes, money market funds offer other benefits, which can cause investors to consider it a kind of bank account. Money market funds, however, are investments and not deposits and therefore are not covered under the Federal Depositors Insurance Company's (FDIC) guarantees. -
Features
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AARP's money market fund is managed by AARP Financial Inc. It is this company that issues advice and administers the money market funds of members. The money market offered requires a minimal investment of $100 and can be used to generate a stable income, as a holding fund while members weigh other investing options, or as an emergency fund. Also, other features include flexibility in investing, also known as "liquidity," and a relatively stable investment structure. AARP Financial tends to purchase the debt of the U.S. government, well-established companies and banks.
Features
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The AARP money market fund offers its members higher interest rates than are average for traditional bank accounts and better liquidity than certificates of deposit. Like a checking account, the money market fund offers access to check-writing privileges that can be used in exactly the same manner as a traditional deposit-held checking account. Both deposit accounts and certificates of deposit are insured by the FDIC, however.
Theories/Speculation
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AARP has granted license to use "AARP" and endorses the services and products offered by AARP Financial Inc., but does not own the company. AARP or its representatives are not involved in choosing investments or in offering its members advice on strategies for investing. AARP has ensured, however, that the financial advisers employed by AARP Financial are certified by the Financial Industry Regulatory Authority (FINRA), which is a nongovernmental body established by the financial industry as a self-regulatory body as provided for by the Securities Exchange Act of 1934.
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