The SEC would normally be the regulator to address the risks to investors taken by money market funds, however to date the SEC has been internally politically gridlocked. The SEC is controlled by five commissioners, no more than three of which may be the same political party. They are also strongly enmeshed with the current mutual fund industry, and are largely divorced from traditional banking industry regulation. As such, the SEC is not concerned over overall credit extension, money supply, or bringing shadow banking under the regulatory umbrella of effective credit regulation.
To realize digital cash you need a payment network with accounts, balances, and transaction. That‘s easy to understand. One major problem every payment network has to solve is to prevent the so-called double spending: to prevent that one entity spends the same amount twice. Usually, this is done by a central server who keeps record about the balances.
Unlike typical bank certificates of deposit (CDs) or savings accounts, money market mutual funds are not insured by the Federal Deposit Insurance Corporation (FDIC); although money market mutual funds invest in high-quality securities and seek to preserve the value of your investment, there is the risk that you could lose money, and there is no guarantee that you will receive $1 per share when you redeem your shares
Overview: Earlier this year, BBVA rebranded itself as BBVA worldwide. Previously, it was called BBVA Compass. While BBVA does have branches Arizona, New Mexico, Florida, Colorado, Alabama, California and Texas. This offer is only available in the other continental states and in Washington, D.C. The 2.15 percent APY on the BBVA money market account is on all balances over $10,000.
Money market mutual funds own a well-diversified pool of high quality, short-dated, interest-paying securities, and pass along the income earned on those securities (after fees) to the funds’ shareholders. When the yields on the securities in which money market mutual funds invest are quite low, the yields that the funds are passing along to their shareholders are also quite low. The interest rate policy of the Federal Reserve (the Fed) is a key driver for money market rates.
Fund yields are typically somewhat higher than bank savings accounts, but of course these are different products with differing risks (e.g., money fund accounts are not insured and are not deposit accounts). Since Retail funds generally have higher servicing needs and thus expenses than Institutional funds, their yields are generally lower than Institutional funds. When selecting a fund, you’ll want to make sure you can make the minimum investment size. It’s also important to understand the investments within the money market fund to make sure you’re comfortable with the underlying investments. Remember that when it comes to any kind of investment, past performance is NOT an indicator for future performance. Just as with any other investment, you’ll want to research carefully before making a decision.
If this sounds similar to banks’ high-yield savings accounts or money market accounts, it is. The largest difference lies in the ability for yields on money market mutual funds to rise proportionately with interest rates. For example, as interest rates have risen, the yields on most bank money market accounts (which are set by the banks themselves) have stayed relatively flat, while money market mutual fund yields have increased.