For those unfamiliar, at least here in the U.S. a “money market account” is sort of equivalent to a savings account, only usually with a minisculely higher interest rate. The accounts trade in T-bills and other “100% safe” government bonds to make their money.
For such an account to have a negative interest rate is nearly unprecedented. I don’t think I’ve ever heard of it happening in the last 30+ years. This WP article makes it sound like it’s happened just once before, and that wasn’t for retail investors.
Wow, within 3 minutes of reading this thread, I got a broadcast email from my broker in Singapore urging clients to transfer all funds from the in-house Money Market Fund to nominated bank accounts “just to be sure”. He suggested it should be done prior to 10am.
They’re talking about this on Bloomberg right now. They say they expect a consumer flight from money markets to regular savings. Apparently, this bodes very badly for those already hobbled banks covering negative balance sheets.
[quote=“Rascal”]Check this money-mkt fund out, it already went downhill months ago (I think it was invested in ABS): PIONEER INVESTMENTS EURO GELDMARKT PLUS
Safest place for your money right now? Under the pillow.[/quote]
[quote=“citizen k”][quote=“Rascal”]Check this money-mkt fund out, it already went downhill months ago (I think it was invested in ABS): PIONEER INVESTMENTS EURO GELDMARKT PLUS
Safest place for your money right now? Under the pillow.[/quote]
Big safety deposit box in the vault of your bank. [/quote]
No votes for “stripper’s garter belt”?
Well, fine, it’s not safe there, but at least it’s entertaining.
If this trend continues, I can see several consumers opting for safer investments (it’s amazing that right now money market accounts, which once were considered “safe investments”, is even a part of this conversation!) such as CDs or High-Yield Savings accounts.
What do you think? Is this a blip on the financial radar or a sign of worse things to come. Regardless, keeping some of your money in an airtight FDIC-insured account would seem to be one of the best ways to weather this current storm.
