The bank safety scare of the past two weeks has sent depositors scrambling to check the rules for FDIC insurance of banking deposits, but many people are left wondering where else they can put their money so that they can sleep well at night.
This column is about the "chicken money," money you can't afford to lose. For many people it's all the money they'll ever have, and at their age or stage in life they can't afford risk of loss. For others, it's a safety stash that gives them courage to stick with long-term stock market investments, knowing a portion of their nest egg is safe and secure. Others merely need to sock away cash, say from the sale of a home, for a short period of time.
The top priority for chicken money is safety, and a certain degree of liquidity. Chicken money won't earn a lot of interest, and you can certainly get higher returns elsewhere. The interest you receive will barely keep up with inflation -- or you may actually fall behind after taxes are paid on your earnings.
But the mantra of the chicken money investor is: "I'm not so concerned about the return on my money, as I am about the return of my money!"
Here are some alternatives to bank deposits, and one clever way to increase your deposit coverage.
Treasury Bills
These are short-term IOUs from the Federal government, which borrows billions of dollars each week at regular auctions, to pay off maturing debt -- and to pay the government's bills as it falls farther into debt! At this time, the world considers these short-term IOUs from the U.S. government to be the safest investment of all.
You can buy Treasury bills in $100 minimums, online through the Treasury Web site.
