How safe is your money market fund? Money-market funds have long been regarded as a safe place to park cash. They paid higher interest than banks and savings and loans, and your deposits were easily accessed.
But that all changed in 2008. The collapse of investment bank Lehman Bros. caused something of a panic as depositors wondered if they’d get their money back. To stem the outflow and prop up the funds, the government temporarily guaranteed money market accounts.
Money funds are still seen as a relatively safe harbor, but on this week's Money Matters, financial commentator Greg Heberlein explains to KPLU's Dave Meyer that you need to know where your fund is investing your cash. More importantly, you need to know if your fund is holding European debt.