<h4 class="dechead">On One Hand: Financial Strength.

Wachovia is one of the strongest banks in the nation, and has a full range of financial products. Wachovia money market rates are competitive and, although not FDIC insured, the bank participates in a guarantee program offered by the U.S. Treasury. This insurance gives investors the security that the money market funds are safe and losses are kept at a minimum.

On the Other: Economic Losses.

Money market funds are kept at a net asset value of $1 per share, however, this amount fell twice under that $1 amount in the history of money market funds. In the most recent fall of 2008, the Wachovia funds were affected. To control the fall and keep their share value at the $1, Wachovia poured money into the funds, taking a $40 million dollar loss. Protecting its name, good standing and preventing investors from withdrawing their money was of paramount importance to the bank.

Bottom Line

Overall, money markets are sound investments, typically invested in government securities, commercial paper of companies and certificates of deposit. The net asset value is generally $1 per share, although this has been known to fall slightly under that amount. It is the yield from the funds that fluctuates up and down and can produce steady profits. Wachovia money market funds have been known to be among the best in the nation because of the strength of the bank.

Source:

CNN Money: Even safe funds play with fire

Bankrate: Is Your Money Market Fund Safe

Blogging Stocks: Money Maket funds Fall Below $1

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