Just wondering
5 replies (most recent on top)
No @OP it is not safe
Get yourself a treasurydirect.gov account (easy--easy) and buy treasury bills / notes / bonds which are 100% safe.
You can see the interest rates they are currently paying here
https://treasurydirect.gov/auctions/announcements-data-results/
They only offer higher interest rate because their credit rating is bad. Risk and return - how much are you willing to risk in the current banking environment to get that little bit more interest?
Here is the disclosure is on the website: “ They are not insured by the Federal Deposit Insurance Corporation, they are not guaranteed by Ford Motor Company”. The troubling part for me is that the fund is NOT backed by Ford Mo.
Also take a look at the latest SEC filling…. https://fmcc-sec-filings.ford.com/sec-filings/default.aspx It concerns me how much money we are borrowing.
You should ask yourself one question: am I fine if I lose $x-x? Perhaps losing ~$5k is fine but what about $100k?!
I pulled my money out 3 years ago because it is not FDIC insured and because I had doubts about FMCC. There are better rates available that are covered by the government up to 250k.
It's not FDIC insured because it's not a bank. You are buying notes in Ford Motor Credit.