Ask Terry Questions Money market mutual fund is uninsured?

Money market mutual fund is uninsured?

By Terry Savage on March 07, 2014 |

I am 70 years old, unmarried and no children. I have a mutual fund with TRowe Price called Summit cash fund, a money fund preserving capital and liquidity. As you can see I am not a risk taker (stock market). I am not comfortable with this fund since there is no FDIC guarantee of my $290K, I would appreciate your recommendation on another alternative for me to place my money. At this stage of my life I do not need this money but in the event I do I would want it federally insured. Thank you very much.

Terry Says:  I have money in T. Rowe Price money market funds, and do not worry that they are not federally insured.   They invest in ultra-short term, safe securities.  The Summit Cash reserves is a good fund to hold — if you don’t mind not earning any interest. That’s because the Fed has pushed rates down  to near zero in an attempt to grow the economy and help the government finance its deficits at low cost!  You could easily ask them to switch half of your money into their US Treasury Cash Reserve money fund, but both are only yielding about 0.01% currently.

And if you’re really worried you can invest in 3 or 6-month Treasury bills direct from the U. S. government, by going to, clicking on “Individual” and then reading how to open an account and buy T-bills at the regular weekly auctions.  It’s easy, done via direct deposit from your bank account, in minimum amounts of only $100.  But first you would have to transfer some of your money from T. Rowe Price to your bank money market deposit account.

But all of that falls into my “chicken money” category.  And I don’t see much need to make those moves, unless it lets you sleep better!

Recent Questions



a personal
finance question