If your bank is FDIC-insured, it means that your account is protected for up to $100,000 per depositor (not per account, but per individual). The $100,000 amount applies to all depositors of an insured bank, except for owners of certain retirement accounts, which are insured up to $250,000 per owner, per insured bank.
Is my money market fund safe?
Ask your brokerage where your money is being held if you aren’t sure. If it’s in Treasuries, then your money may be safer than it would be in other types of funds. Some of the money market funds that “broke the buck” in recent weeks did so because of exposure to Lehman Brothers.
For our clients, we have selected the Schwab Government Money Fund, which invests in treasuries issued or guaranteed by the U.S. government, and it’s the safest money fund there.
Is my brokerage safe?
Your investments at your brokerage are insured by the Securities Investor Protection Corporation (SIPC), which is for both securities and cash, in the event of a broker-dealer failure. SIPC provides up to $500,000 of protection for each account.
Is this volatility ever going to end?
Yes. Over time, the overall trend of the markets is up, interrupted by periods of high volatility such as the one we’re in now. Eventually, we will recover from this, too, and we’ll begin to see areas that are once again moving higher.
Any other questions?
Leave us a comment, and we’ll get back to you with an answer!