I am wondering whether I should take the money out of the money market fund from my amtd trading account. So far, I have not had any problems with it. However, the interest rate they pay is very low (.1%). I am wondering if there is a significant risk of losing money if something like the recent Reserve fund fiasco were to occur. Thanks.
this is the email they sent me: Thank you for your e-mail. You have a TD Bank MMDA, FDIC insured. The MMDA is an interest bearing account with TD Bank USA, N.A. No investments are made as with money market funds. TD Bank USA, N.A. and TD AMERITRADE are affiliated through their parent companies. - NO prospectus for the MMDA (terms are provided in the regular Client Agreement) - Interest-only deposit account - Not like a money market fund-no investments - Covered by FDIC - $100k for non-retirement accounts - $250k for IRAs Exception: Coverdell accounts covered to $100k - NOT covered by SIPC coverage
i opted out of my money market sweep after countrywide started having problem as I saw the fund had a 3% exposure to, also didn't like the exposure it had to other bad banks. Risk/reward isn't there for parking cash with yields this low.