| Turning up heat on retirement savings
Bank of America Corp. plans to launch on Sunday a $35 million advertising campaign to promote its retirement savings accounts, as the Charlotte, N.C., bank stakes its claim in one of the fastest-growing areas of financial services. "We're in this to win," said Jeff Carney, the bank's chief of retirement products. About 54 million households have a relationship with the bank, but it manages individual retirement accounts for just 1.5 million people. Next year the print and online campaign may expand from IRAs to include the bank's 401(k) retirement savings plans and similar products. "People realize that 401(k)s and IRAs are the two most important vehicles for you to save for yourself," Carney said. The bank's spending would dwarf the $11.6 million that all banks collectively laid out last year to promote retirement products, according to New York data firm Competitrack.
Money funds set aside cash for trouble
One of the safest and, lately, most attractive places for people to park some of their savings - the money market account - is suddenly looking a little less secure thanks to fallout out from the mortgage mess. Bank of America Corp. on Tuesday became the latest financial company to announce plans to shore up a group of money market funds, in its case with a $600 million reserve. The move raises questions about whether this category of savings might suffer hits that are serious enough to cause losses for investors. The notion that some money market funds might give investors less than a dollar-for-dollar return on their investment, an occurrence known as "breaking the buck," is a sobering thought. Some experts say it remains unlikely, however. The Bank of America funds have run into trouble with a type of investment known as a structured investment vehicle, or SIV, which uses borrowed money to invest in risky but high-yielding investments.
Money markets bend, don't break
One of the safest and, lately, most attractive places for people to park some of their savings -- the money market account -- is suddenly looking a little less secure, thanks to fallout from the mortgage mess. Bank of America Corp. announced plans Tuesday to shore up a group of money market funds, in its case with a $600 million reserve. The move raises questions about whether this category of savings might suffer hits that are serious enough to cause losses for investors. The notion that some money market funds might give investors less than a dollar-for-dollar return on their investment, an occurrence known as "breaking the buck," is a sobering thought. Some experts say it remains unlikely, however. The Bank of America funds have run into trouble with a type of investment known as a structured investment vehicle, or SIV, which uses borrowed money to invest in perhaps risky but high-yielding investments.
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