• Mike

    I can only assume that BankingAdvice.com is written by and/or sponsored by banks, since this advice is so stupid. The article doesn’t even mention the money lost in money market funds due to the rate of inflation. If you are getting 0.5% on your money market and the inflation rate is 3.5%, YOU ARE LOSING MONEY! HELLO?!

    • admin

      Hi Michael,

      Thanks for your comments.

      For your information the article is written by myself, and not sponsored by “banks”.

      You are NOT correct in your statement about “losing money”, however you will lose buying power if inflation is 3.5% and the bank you deposit money in is only returning you 0.5%.

      Of course you could have invested your money is the stock market (e.g. S&P 500) in the year 2000 and have a negative return i.e. real loss of your money as of now.

      The point of this article was to identify potential issues with money market funds (not FDIC-insured) versus bank money market accounts, which do provide FDIC insurance. I’m sure you are aware that several money market funds over the last several years have seen their net asset value drop below $1.00.

      Best!

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