WARNING: Treasury money market fund guarantee program does not cover new deposits or accrued interest

Just to reiterate an important point... The new Treasury Temporary Guarantee Program for Money Market Funds ONLY covers balances in any particular fund as of Friday, September 19, 2008. Any new deposits after that date or accrued interest is NOT covered by the guarantee. That is really stupid, but that is the way it is.

In other words, if you leave your funds where they were on 9/19, the principal is protected, but any accrued interest or new deposits are not.

And if you move money from one fund to another, you LOSE the protection you had in the old fund and DO NOT get protection for that same money in the new fund. Also, this new protection is only TEMPORARY and due to expire in three months unless the Secretary decides to extend the program due to ongoing financial turmoil (which they refer to as "dislocations in credit markets.")

OTOH, I personally am not worried about the safety of Fidelity money market funds, so the stupidity of the new Treasury program is irrelevant to me.

See: Treasury's Temporary Guarantee Program for Money Market Funds including the FAQ.

-- Jack Krupansky