How to Secure Your Savings with a U.S. Treasury Money Market Fund

Bank failings are increasing during the current period of economic upheaval. But are your hard-earned savings safe in your local bank? You can gain more security for your savings by diversifying your money with a U.S. Treasury money market fund.

During the Great Depression, when banks were failing or assets being frozen, the U.S. Treasury never once failed to honor a transaction. So even if your local bank is not safe from failure, the U.S. Treasury can provide a safety net for some of your savings and still provide a better rate of return than a typical savings account.

Instructions

1. 

   Find the right kind of U.S. Treasury money market fund. Some money market funds are not fully invested in assets backed by the U.S. Treasury, so you need to pick one that is 100% backed by the U.S. Treasury.

2. Know that a U.S. Treasury money market fund is not a bank. It is actually a mutual fund and has expenses (often called an expense ratio).

3. 

   Understand that a U.S. Treasury money market fund is not FDIC insured. For a period of time money market fund companies offered a guarantee, but this is being eliminated and most money market funds no longer or will no longer offer this guarantee.

4. You will need to have a minimum to open a money market fund. Minimums vary with money market fund companies.

5. 

   You will be able to write checks with your U.S. Treasury money market fund. These checks are free with your account, but there may be a check-writing minimum (for example, you may be required to write a check no smaller than $500). Check with the money market fund company for rules.

6. Ask the money market fund company if you can set up an automatic savings plan. Some money market fund companies will waive the account minimum if you set up automatic deposits to your account.