So I understand that Money Market Funds, etc. etc. are not FDIC insured.
I have been wondering if everyone throws money at Money Market Funds and all, how come no one talks about "Guaranteed Interest Accounts"?
Prudential Guaranteed Interest Account claims to guarantee AT LEAST 3% returns a year for only 0.10% gross fee.
https://nb.fidelity.com/public/workplacefunds/view-all/OTSM
And New York Life Guaranteed Interest Account guarantees AT LEAST 1% returns a year for only 0.10% gross fee.
https://nb.fidelity.com/public/workplacefunds/summary/GADQ?fundId=GADQ&planId=95378
Are there any downsides to this? Why would people choose money market funds when there's a guaranteed interest rate account that gives such high interest rate back?
Also, I see on Fidelity their money market funds are FZFXX, SPAXX, and SPRXX. Their 10 year rate is like 0.17% while its gross fees are 0.42%. Why would anyone sane then put their money on these money market funds?
Wouldn't these yield negative savings because the fees are higher than the rates? Am I missing something fundamental because I cannot understand why people put money in money market funds when their yields look negative while there's something like a "Guaranteed Interest Account" which gives AT LEAST 3% a year and only has a 0.1% gross fee.
Also, what are the risks of a guaranteed interest account like Prudential's?
Submitted November 10, 2018 at 07:58AM by Fwellimort https://ift.tt/2POQjX5
