With the Bear Stearns fiasco, no bank seems
secure. So...
When depositing money with a regular bank that
has FDIC insurance up to 100K, if the bank declares
bankruptcy, I assume the account holder loses everything
above 100K. Is that correct? So the way to protect
oneself is to spread the money across accounts
with < 100K in each.
Likewise, Fidelity and Vanguard have their own
"cash reserves" fund. The monies in their accounts
are insured by the SIPC to 500K (100K for cash
claims). So I assume that's where the account holder
goes if Vanguard/Fidelity goes bust. But then, with
these accounts there's also the added risk that the
fund share itself lose money because of defaults, right?
For example, if one has invested in VCTXX, then
one could lose part of that money if the state of
CA goes bust, right? What can one do in this
scenario? Just stick with treasury funds?
Anoop
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators
strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM
THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on
the
Newsgroup.
|
