Money Market Account Safety
All types of money market accounts are relatively safe. The reasoning behind the safety depends on the type of money market account you have.
Other People Are Reading
-
Types
-
Money market deposit accounts (MMDAs) are bank accounts that have higher interest rates and higher account minimums than savings accounts. Money market mutual funds invest your money in a collection of debt instruments.
FDIC Insurance
-
FDIC insurance covers up to $250,000 of money in MMDAs if the bank fails. This limit includes all money held in insurable accounts per bank, so if you have $50,000 in a savings account, only $200,000 of the money in your MMDA would be covered.
-
Potential
-
The FDIC limit is scheduled to drop to $100,000 in 2014.
Money Market Mutual Fund Regulations
-
The government restricts what debts can be bought by money market mutual funds. No debt can have a maturity period of more than 13 months and the average maturity date for all debts must be within 90 days.
History
-
According to Business Week, the only time a money market mutual fund lost value was in 1994 when the Community Bankers U.S. Government Money Market Fund returned only $0.96 per $1.
-
