Questions & Answers
Friday, September 19, 2008
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Investors Ask; NBR Answers
The financial turmoil on Wall Street has many people wondering about the security of their investments. In this special section, NBR takes a moment to answer some of the questions you and other viewers are asking.
QUESTION #1: Are my money market funds safe?
Answer: Yes. Beginning today, the U.S. Department of the Treasury will insure all U.S. money market funds, estimated to be worth up to $2 trillion.
Read Stephanie Dhue's latest blog entry about money market funds: Money Market Fund Risk.
QUESTION #2: Are my brokerage accounts safe?
Answer: Brokerage firms must meet capital requirements. If they fail, most accounts are covered up to $500,000 by the Securities Investors Protection Corporation (SIPC).
QUESTION #3: Is my annuity safe?
Annuities are sold by insurance companies. If they cannot pay, the state steps in. Coverage varies, but typically you can recoup $100,000 in withdrawal and cash values.
QUESTION #4: Is my bank safe?
The Federal Deposit Insurance Corporation (FDIC) says 98% of banks are well capitalized. FDIC insurance generally covers $100,000 per account holder.
ADDITIONAL RESOURCES*
- Fund Democracy
Fund Democracy is a nonprofit advocate for mutual fund shareholders. Its founder and president is Mercer Bullard. - National Organization of Life & Health Insurance Guaranty Associations (NOLHGA)
NOLHGA is "a voluntary association made up of the life and health insurance guaranty associations of all 50 states, the District of Columbia, and Puerto Rico." The guaranty associations insure annuities, among other things. The website offers links to all state guarantee associations. - Securities and Exchange Commission (SEC)
The SEC regulates U.S. securities exchanges. This SEC website offers background information about a variety of investing topics including:
- Annuities
- Securities Investor Protection Corporation
*Clicking these external links will take you off the NBR web site on PBS.org. NBR has no affiliation with these sites.
