I think FDIC insurance is a touch safer/better than a treasury MMF, simply because the FDIC has experience and their own capital separate from Congress. To pay the debt currently, it literally requires an act of Congress. If you think Congress could get idiotic enough to temporarily delay US debt repayment, then you should probably prefer FDIC insured funds, but that would only help you if the debt repayment delay was very short lived.Are you all not concerned that the high yield APY options (money market funds) aren't FDIC insured?
Wouldn't something like Wealthfront be better to use for cash/banking purposes?
If that's not a concern you have, then MMF's that hold treasuries are effectively as safe as FDIC insured cash, they are both fully backed by the US government. For the extremely unlikely case that Fidelity blows up, then you have SIPC and third-party insurance on MMF's. But neither are in a position to easily handle the tens of trillions of dollars Fidelity manages.
Fidelity will give you FDIC insured cash(and will do it for millions of dollars) OR MMF's your choice. Of course Fidelity doesn't pay much on their FDIC insured cash buckets, but basically no brokerage does. If you feel you need FDIC insured cash and you want a high yield, you are basically stuck going through traditional banks. I'd recommend you pick one that has a long track record of paying high yields, like Ally Bank or Alliant Credit Union out of Chicago.
Only you can decide how you define "safe". Me, I'm happy with my MMF's, but I also live in hope that Congress isn't actually as idiotic as they appear to be sometimes.
Statistics: Posted by zie — Tue May 07, 2024 9:42 pm — Replies 6415 — Views 1204304