Previously, I mentioned that the federal government is now insuring money saved in money market mutual funds. The move was made in response to a rare dip below a dollar for the value of shares in the Reserve Primary Fund. Two points of clarification are warranted. First, as reported by ABC News, the insurance only pertains to money market mutual funds that pay to participate in the program, only covers money in such funds as of September 19th (not newly invested money), and initially runs only until December 19th (although the Treasury secretary will have the option to renew the program for up to an additional nine months).
With Fidelity and Vanguard joining the Fed’s program, the Wall Street Journal reported that “all the major fund families will participate.”
The FDIC insurance limits were also temporarily increased (until the end of 2009) since the last issue of this eNewsletter. The insurance now covers up to $250,000 per depositor per insured bank. In the case of a joint account, each co-owner now has $250,000 of coverage.
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