nmap
12-18-2008, 12:44
The Fed reduced interest rates to 0.25% recently. In addition, yields on T-Bills have declined sharply.
Those with money market funds that invest in short-term securities may wish to keep an eye on the yield. The revenue generated by the underlying securities may be less than the expenses. The expenses are disclosed in the prospectus. This means that the money market fund may produce a negative yield - in other words, you have less money at the end of the month than at the beginning.
This shouldn't be a problem for money market accounts, such as banks offer, but it may be an issue for money market funds.
It may be worthwhile to look around for bank and credit union money market accounts that offer higher yields and FDIC insurance for banks, or NCUA for credit unions.
And, just for the record, my thoughts on the matter are worth exactly what you just paid for them - nothing. :cool:
Those with money market funds that invest in short-term securities may wish to keep an eye on the yield. The revenue generated by the underlying securities may be less than the expenses. The expenses are disclosed in the prospectus. This means that the money market fund may produce a negative yield - in other words, you have less money at the end of the month than at the beginning.
This shouldn't be a problem for money market accounts, such as banks offer, but it may be an issue for money market funds.
It may be worthwhile to look around for bank and credit union money market accounts that offer higher yields and FDIC insurance for banks, or NCUA for credit unions.
And, just for the record, my thoughts on the matter are worth exactly what you just paid for them - nothing. :cool: