---
title: How safe is your money-market fund
description: An effort to increase the security and transparency of money-market mutual funds stalled in August when Securities and Exchange Commission chairman Mary Schapiro couldn't rally…
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published: '2012-09-27T20:23:00.000Z'
modified: '2012-09-27T20:23:00.000Z'
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![Brothers in Arms](https://img.money.com/2012/01/533789321.jpg)
*<b>Brothers in Arms</b> An American soldier comforts a badly wounded comrade during the fight to take Saiapn from the occupying Japanese troops.*

An effort to increase the security and transparency of money-market mutual funds stalled in August when Securities and Exchange Commission chairman Mary Schapiro couldn't rally enough SEC support.

At issue: investors' belief that money funds, which aren't FDIC-insured, are risk-free.

To counter that perception, Schapiro wanted funds to disclose precise changes in their net asset value (NAV) per share; currently they all report $1, but that's because they're allowed to round to the nearest penny.

[Related: Best banks 2012](http://money.cnn.com/gallery/pf/2012/09/25/best-banks-2012.moneymag/index.html)

And to ensure each fund could handle a flood of investor withdrawals if its NAV fell below $1 -- in 2008 one money fund's NAV hit 97¢ -- Schapiro wanted funds to keep a cash cushion on hand.

Even without the proposed changes, it's money funds' "pitifully low" interest rates that should scare you nowadays, says Dallas adviser Charles Sizemore. Put your dough instead in a bank account, he says, where returns are similar and your money is insured.

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