[Uglyowl]

Most of the money markets discussed on this board are Money Market Deposit Accounts (MMDA's) and are fully insured to $100,000 and carry zero risk.

These deposit accounts have nothing to do the stock/bond markets, but do have a similar confusing name.

Here is a quick synopsis:


Two products that are easy to confuse because they have similar names are Money Market Deposit Accounts and money market mutual funds (often called money market funds). MMDAs, as we described previously and as the name indicates, are deposits and, as a result, are covered by FDIC insurance. Money market mutual funds, on the other hand, are funds that invest primarily in short-term corporate bonds or government securities and are not deposit accounts insured by the FDIC.

To minimize potential confusion about which products are FDIC-insured, banks and savings institutions are required by federal banking regulators to clearly differentiate insured deposits from investments, both in their sales practices and their advertisements. For example, to the extent possible, investment sales should not take place in a bank's teller area. Institutions also must ensure that sales personnel are properly qualified and trained, and that they recommend investments that are suitable for each customer. In addition, when offering or advertising an investment product to a customer, FDIC-insured institutions must indicate that the investment:


Is not FDIC-insured;


Is not guaranteed by the bank or savings institution; and


Is subject to investment risk, including the possible loss of principal.