Your savings are in a shin-plasters market mutual fund your broker told you was safe, but you stupefaction if it’s as safe as an account at an FDIC-insured bank.

The short answer is no. A small change market mutual fund (MMMF) sold by a brokerage firm or a requited fund firm is not backed by permanent federal insurance. Only a dough market deposit account (MMDA) sold through a federally insured bank or ascription union, or a bank subsidiary of a brokerage or mutual fund company, is appropriate for insurance. I know, I know: MMDA, MMMF why do they have to compel it all so confusing?

So just to be sure you have it down straight: M M D A: Sold at a bank or dependability union, or through a bank subsidiary of a brokerage or fund company. Single for federal deposit insurance. M M M F: Sold through a brokerage firm or requited fund company. No insurance. Now, in normal times, an MMMF is considered unprejudiced as safe as an MMDA. But I don’t have to tell you how not normal the times are for us right now. And I don’t reckon you should rest easy with the temporary insurance offered by the pinch Treasury Solution last September. It’s important to understand that this Resources plan is temporary and voluntary. We don’t know how long the Treasury will hold offering this deal to MMMFs; Treasury is currently authorized to keep the map through September 18, 2009, but it must reauthorize the plan every three months between now and then. Your brokerage stable or mutual fund firm must choose to become part of the program (and pay a fee to participate). So, at the rather least, you need to check with your brokerage or fund unyielding to find out if it is participating in this temporary insurance program. But here’s the categorically important caveat: Only deposits in MMMFs as of the close of business September 19, 2008, are unwed for the Treasury’s insurance. That’s just too many question marks to take care of with if you ask me. Here’s my safe and sound MMMF strategy for 2009: Preserve your money with the same firm but move it into the Moneys MMMF (every major brokerage and fund company has this election). If your money is invested in U.S. Treasuries, you have nothing to worry thither. Your money is backed by the full faith and credit of the U.S. government. There aren’t thriving to be any defaults in that portfolio. And you don’t have to worry if the Treasury Department at the end of the day removes its current MMMF insurance offer. If you don’t have a Treasury MMMF way out at your existing brokerage or Fund Company, then I would contemplate on moving my money into an insured bank deposit in 2009, or to a brokerage or bread company that offers a Treasury MMMF. (To be extra safe, I second that money you need to pay bills, etc., be moved into a bank or ascription union MMDA account. We’ve seen how the Reserve had to temporarily freeze some accounts; you difficu to make sure that money you need quick access to is in act available. Right now the only way to ensure ready access is with an insured bank or credence union account.)

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