Thanks to everyone who contributed today to our live blogging session: "Answers to Your Money Questions"....
Ember Martin, CFP
Deschutes Investment Advisors
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Raymond said:
Following up on our bank saying that our money
market account is covered by FDIC and you disagreeing, is there a difference between a "daily money market account" and a "money market fund"?
Again, there is a distinction between money market accounts, depending on whether its technically a mutual fund or a deposit account. You should check with your bank for a precise verification of which type you own.
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Anonymous asked "Are retirement accounts insured under FDIC?"
The answer is yes, up to $250,000, provided they meet several criteria. IRAs, Roth IRAs, SEPs, SIMPLEs, Keoghs and some 457 plans all qualify, provide they are 'self-directed' and offer more investment choices than a single deposit account of the custodial institution. Coverdell, HSAs and MSAs, 401ks and 403bs, and Defined Benefit plans are NOT covered. as mentioned earlier the PBGC covers many large retirement plans under ERISA and DOL oversight.
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Tom said:
Is gold still a good investment or has it peaked?
Most investments professional do not consider gold an investment but rather a substitute for cash. There is no inherent return expectation for gold, since like most commodities, its return is based purely on supply and demand. An expectation for return is based upon the wealth creating dynamic of capitalist enterprises on the one hand, or interest on debts, on the other..
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Judy M. asks:
What will happen to my home mortgage loan and my home equity loan with Wamu if they fail?
Depending on the exact nature of any possible action by the regulators, your loan will almost certainly remain in place and your obligation to pay it remains unchanged as well. You may, however, end up paying it to someone other than your original lender.
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First, let's start with a couple of clarifications. Several readers have posted questions asking for clarification about the precise coverage afforded by FDIC insurance. Earlier today we posted comments about "money market funds" not being covered. In fact, FDIC insurance does covers 'money market DEPOSIT accounts' but doesn't cover 'money market mutual fund' accounts. Mutual funds are securities while 'deposit' accounts are banking products. Many Wamu personnel have commented that their money market accounts are deposit accounts and not securities, and so are covered by FDIC. To be safe I would ask my banker at Wamu to see the exact definition of the money market account I have.
Another question that came up this afternoon concerned a lesser known provision of FDIC insurance that applies to deposit accounts with beneficiary designations. If your deposit account is titled as a 'transfer on death', for example, then beneficiaries can be named. If these beneficiaries are 'qualifying' then the account could indeed be insured for up to $200k. These rules get pretty complex so its best to refer to the FDIC website at www.fdic.gov/deposits.
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Steven asks: "One of my stocks is WAMU. I have automatic purchase setup monthly. Should I continue to purchase this stock?"
No, Steven, you should stop buying WAMU stock. And try to avoid all other financial company stocks for quite a while. The risk in them is extraordinary and highly speculative and not appropriate for investing at this time. Look into diversified mutual funds with low expenses.
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Ken asks: "I have $100k cash and was thinking of buying a CD from WAMU. Is this safe""
Not at this time, Choose another bank such as Wells Fargo or Chase or Citibank or BofA
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Ron asks: "Are my the investments in my Merrill Lynch accounts safe? They are "Tiger Series Treasure Notes in an IRA"
Ron, your Merrill IRA and its investments are not at risk, irrespective of the BofA deal to buy Merrill. Call your broker and he'll explain it in detail.
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what is going to happen to people who are in the process of short sales, or do the new rules as I understand them...apply to individuals
I am 59 years old this year i have my retirment savings in aig. I am sick of worry of losing my money in any money firm and i am thinking of pulling my money out of aig and putting it in a bank ira were yes i will not make a huge profit but at least it is safe, federally protected, unless of course we have another great depression. Am i being to foolish?
thank you
My Merrill Lynch broker says it is safe to have more than $100,000 in my Money Market Account because ML has 3 or 4 large banks underwriting the funds. He says even 200,000 or 300,000, would be FDIC insured in my one ML Money Market Account--not the fund, the banking product (he was saying this even months ago, before the recent alarming events). I still don't see how this can be so, and I haven't heard it mentioned anywhere else.
Thanks!
my ML broker says that more than
$100,000 even $300,000 or more) is FDIC covered in Merrill Money Market Accounts because they are backed by some agreement with 3 or 4 large banks. I don't see how this can be so, and haven't heard it mentioned elsewhere. Is it really straightforwardly what he says it is?
Thanks.
I have an annuity with AIG for $100,000. Will I be able to surrender my annuity so that I can get my money back. Or have I lost my money?