Considering Money Market Investing at 5% +!

I was reading Kiplingers magazine this month and came across their article featuring their best everything for 2006.

The magazine wrote that the best money market fund was Transamerica's Premier Cash Reserve Fund which yielded 5.2% and required only a minimum investment of $1,000. So I decided to look into this further and do a simple good/bad analysis for myself. So here goes:

The Good:

- The yield on this account hovers around 5%.
- The account minimum is a reasonably low $1,000
- I can write 6 checks per month ($250 minimum check amount)
- I can withdrawal money whenever I like.

The Bad:

- The yield is not significantly higher than what is available at online banks like ING, Emigrant Direct and HSBC.
- The money would not be FDIC insured.
- The effective yield changes daily, so the current yield of about 5% could decline.
- Although the risk is pretty low, you technically could lose money in this fund.

After making this list, I tried to figure out if there would be anyway that this would be useful for us based on the above. The only thing I could really think of was that this might be a good spot to house our wedding fund until our wedding next year given that it has checkwriting abilities.

But I think ultimately, while I liked the idea behind this money market fund, I most likely won't pursue this and will stick with saving through the online savings banks mentioned above.