Yes, you will be covered if you move money back to the account and fund it was in on September 19, 2008

Some people may have been frightened into moving money from a money market mutual fund into a bank account that has FDIC protection and are now concerned that if they try to move it back that will lose the new Treasury guarantee coverage that would have applied to the money market mutual fund if they had left the money there, but in fact you can move it back as long as it is to the same account and the same money market fund. It is only if you move the money to a different account or a different fund that you lose the coverage.

To repeat, move the money back to the same account and the same fund and you get the original coverage back.

You will also get the coverage back even if your fund is not currently in the program but decides to join it after you had taken out funds.

For example, if you had $300,000 in a money market fund on September 19, 2008 and moved it to a bank, you can move it back to the same fund and same account and the whole $300,000 (but not any additional deposits or accrued interest) will be covered by the Treasury guarantee program, assuming that the fund joins the Treasury guarantee program (ask them if they have.)

Note: The bank account is only FDIC-insured up to $250,000, so make sure not to exceed that limit for a given bank.

And note that the FDIC limits only apply to bank deposit accounts and that money market funds covered by the Treasury guarantee program have no limit other than your share balance on September 19, 2008.

The key here is your balance (number of shares) in any given account and fund as of the close of business on September 19, 2008. You can take money out and put all or some of it back and the coverage will be for the full September 19 amount or the current amount if it is less.

The Treasury FAQ tells us that:

If the number of shares held in an account fluctuates over the period, investors will be covered for either the number of shares held as of the close of business on September 19, 2008 or the current amount, whichever is less.

And one of the examples from the FAQ tells us that:

If an investor owned 100 shares in a fund as of close of business September 19, 2008, subsequently sold 50 shares and later bought 25 shares, the investor owns 75 shares on the day the guarantee payment is made and will be guaranteed for 75 shares.

See: http://treas.gov/press/releases/hp1163.htm

Fidelity (and Vanguard) still have not decided whether to participate in the Treasury guarantee program, but given their credibility, conservative management, and financial resources it is not as important for them. For anybody other than Fidelity and Vanguard I would insist on the guarantee program. Besides, Fidelity and Vanguard can decide to join the program at any time should they find it advantageous.

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

-- Jack Krupansky