Money market
How safe are money markets funds like fidelity , vanguard. I hear schwab money market funds are insured. I’m retired and and would like to move to schwab but heard there could be 2% penalty in a bad market. Most of my is now in money markets.
Thanks Terry
Terry Says
Money market MUTUAL FUNDS are not FDIC insured — as opposed to money market DEPOSIT ACCOUNTS at banks.
These mutual funds are insured by SIPC against malfeasance by the fund management company.
A mm fund offered by Vangoard, Fidelity or Schwab falls in the latter category. Same degree of security.
Money market mutual funds own short term IOIs, either fromtop-rated companies or some limit their securities to short term US government IOUs.
There was some concern in recent days that the corporate commercial paper market might become illiquid. But now that the Fed has promised to add any necessary liquidity in this market that worry has gone away.
