Could money market funds break the buck again?
Posted on January 19th, 2012
Money market funds are nicknamed sleep-at-night funds because they’re largely safe and stable.
They invest in short-term, highly rated debt issued by banks, governments and corporations worldwide. Currently, $2.6 trillion are stashed away in money market funds, waiting to be reinvested.
Yet, in September 2008, the $65 billion Reserve Primary Fund in New York broke the buck — selling for less than the $1 net asset value of a fund share — after it was caught holding bankrupt Lehman Brothers debt.
A panicked wave of money market fund redemptions followed, causing the government to step in. “A lot of funds were in danger of going under,” says Mike Krasner, the managing editor of iMoneyNet in Westborough, Mass. “Commercial paper was freezing up worldwide.”
Could money funds break the buck again?
Money market mutual funds, or MMFs, try to keep their net asset value constant at $1 per share.
Tags: Funds, Market Funds, Money Market, Money Market Funds
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Ask the expert: Why are bond yields rising, and will money market rates follow?
Posted on December 17th, 2010
Q: Like a lot of people, I rolled my eyes when the Federal Reserve announced a new program to drive interest rates down. Aren’t CDs and money market rates low enough already? Much to my delight though, it seems the program isn’t working–bond yields seem to be skyrocketing. Why is that, and will it spill over into CDs, savings accounts, and money market accounts?
A: It’s been one of the more curious developments of the year. No sooner did the Federal Reserve announce a program to buy bonds so yields would move lower, than bonds started falling in price and yields started rising. All of this after a sustained rally in bonds prices previously. Ben Bernanke, it seems, really knows how to break up a party, even when he doesn’t intend to.
Why has the bond market reacted in the opposite way from what the Fed intended? Perhaps t
Tags: Market Rates, Money Market, Money Market Rates, Rates
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Why Bother With a Money Market Account?
Posted on February 7th, 2010
As noted by J.D. over at GetRichSlowly.org, money market accounts are often not very well-understood. For some savers, the question arises in a quite blunt format:
“Why should I bother with a money market account?”
Especially for people who already have a savings account and a checking account, a money market account can seem like an extra account that doesn’t have much value. However, upon closer inspection, one can see why money market accounts have a loyal following among conservative investors.
Less Liquid Than a Checking Account
One main reason to use a money market account is to not have easy access to your money, so that you can save more of it and spend less of it. Many m
Tags: Account, Market Account, Money Market, Money Market Account
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Everbank 3 Month Money Market and Checking Promo
Posted on November 8th, 2009
Everbank is offering a 3 month promotional rate of 2.51% on their money market and checking accounts. The rate applies for up to $50,000 on their Yield Pledge Money Market Account and up to $100,000 on their FreeNet Checking Account. This promotion is only available to people who have never opened these accounts, and you are allowed to take advantage of both deals if you’ve never opened these accounts with Everbank.
The current ongoing rate after the promotional rate is 1.51% APY on the money market account. The checking account rates are tiered after the promo rate ends. You get 1.51% APY for balances over $100,000, 1.45% APY on balances from $50,000 to $100,000, and the rates below $50,000 are all under 1%.
The FreeNet Checking Account doesn’t come with monthly fees unless you activate online billpay and your balances falls below $5,000. The
Tags: Money Market, Promo
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EverBank’s promotional money market rate: 2.51% APY
Posted on September 13th, 2009
EverBank has a promotional money market account which is currently yielding 2.51% APY for the first 3 months. This interest rate then drops down to a still respectable 1.77% APY after the promotional period. To put this offer in perspective, the average interest rate for money market accounts nationwide sits at roughly 1.20%. This account used to provide 3.01% returns (for the intro period) but has since dropped.
Money market account through EverBank:
- Earn a yield within the top 5% of competitive accounts. Always.
- Low $1,500 initial-deposit requirement
- No-fee Online and Mobile Banking
- Up to six withdrawals per month
- FDIC insured
Learn More
Tags: Apy, Money Market, Promotional Money, Promotional Money Market
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