A few weeks ago, I wrote about the new money market accounts at savings institutions and the movement of money out of the money market mutual funds. I said then that fund sponsors would certainly be looking actively for ways to get the money back into their ballpark.
It didn't take long.
Shortly after writing the earlier column, a news release arrived from the Calvert Group, Washington-based mutual fund sponsors with a half-dozen assorted funds and more than $1.3 billion in assets under their management.
The release announced the establishment of their own insured money market account, which will be paying a premium (currently one percent) above the rate on 91-day Treasury bills.
You open your account, called the "Calvert T-Bill Extra," through the Calvert Group. The fund sponsors place your funds with one of a participating network of banks and savings and loan associations.
Because the money ends up in a depository institution, it is insured--up to $100,000--by either the Federal Deposit Insurance Corp. (FDIC) or the Federal Savings and Loan Insurance Corp. (FSLIC).
Why go that route instead of dealing directly with your own bank, S&L or credit union? Well, if you're already an investor in other Calvert funds, you have the convenience of being able to move dollars readily among the funds in the Calvert family--including the money market account.
If the balance in your money market account falls below $2,500, a bank or S&L is permitted to pay you only 5 1/4 percent on your money. With T-Bill Extra, any time the money market account balance drops below the $2,500 minimum, your money is automatically transferred to one of the higher-yielding (but uninsured) money funds in the Calvert Group.
And if the monthly six-transaction limit at the regular money market account is inconvenient, you can transfer a chunk periodically to your Calvert money market fund account and take advantage of its unlimited check-writing privilege (but with a $250 draft minimum).
At about the same time some material came in from the Fidelity Group, one of the major fund sponsors with headquarters in Boston.
This one was also an announcement of a new service--a fund-sponsored asset management account to be called "Fidelity USA," for "Ultra Service Account."
Fidelity USA is a close cousin to the various financial basket accounts offered by the brokerage houses: Bache's "Command Account," Merrill Lynch's "Cash Management Account," Charles Schwab's "Schwab One Account." (Some frills are creeping back into the no-frills discount brokerage houses.)
The basic vehicle is Fidelity's money market fund, coupled with unlimited checkwriting with no minimum dollar amount.
In case you're wondering, this is not a pitch for Calvert or Fidelity. It is simply an attempt to keep you up to date on what's going on in the world of personal finance.
The fact is that, while I wouldn't characterize it as a jungle, it has become a new and more complicated world. And the on-going deregulation of the old-line financial institutions has contributed greatly to the blurring of what once were clear-cut lines separating the various kinds of financial institutions.
Before very much more time passes we'll be hard put to distinguish among the depository institutions, brokerage houses and investment companies--with the large insurance conpanies looking for a piece of the action, too.
One stop financial supermarkets are not very far away.