Monday, October 12, 2009

What are the risk in a money market account?

What exactly decreases an indivisuals principal balance within a money market account? where does this particular account stand in contrast with a CD.Please feal free to foward your oponion on a comparison between Bank of America and Capital One. Which would you bank with?
What are the risk in a money market account?
With the banking industry not doing well the risk is much higher in money markets since they are not insured by FDIC and hence are not able to be covered in the event of a bank failure. In light of the mortgage industry crisis I would steer clear. The CD deposits may not make much money on interest however they are FDIC insured up to 100,000 dollars.


Also the stock market being in the tank creates opportunity for those that are cash tight. For researching safety of banks that are doing the best can be found in such online places as Morning star.com and Bankrate.com .
Reply:Money market accounts are investment accounts on (theoritically) low risk, short duration bonds. They are not insured by the FDIC. Therefore, there is the possibility of losing value (the terminology on Wall Street is "to break the buck").
Reply:none





Money market accounts are FDIC insured.








Zeuz is referring to money market mutual funds.
naming

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