The PayPal Money Market Fund Is Closing

PayPal_Frank
Administrator
Administrator

MMFclosing2.JPG

 

FAQ’s

I received an email stating that the PayPal Money Market Fund will be closing. Is this true?
That’s correct. We will be retiring our Money Market Fund product on July 29, 2011.


Why are you closing the PayPal Money Market Fund?
Due to market conditions, the financial advantages of maintaining a PayPal Money Market Fund account have diminished for our customers. As a result, we have decided to stop offering the product.


When exactly will my Money Market Fund account be closed?
The Money Market Fund will be closed, effective July 29, 2011. No one will earn any dividends after 7/29. Any undisbursed dividends that customers have earned will be transferred into their Paypal account within 7 business days after we close the fund.

 

Do I need to do anything?
No action on your part is necessary; PayPal will close your Money Market Fund account automatically. You will continue to have access to your PayPal account after the Money Market Fund closes.

 

What happens to the balance in my MMF once I’m unenrolled?
PayPal will transfer any undisbursed dividends you’ve earned into your PayPal account within 7 business days after we close the fund.


Your PayPal account balance will remain available to you as it always has been. When the MMF is closed your PayPal account balance will no longer be invested in the Money Market Fund and held there until you are ready to use it. Instead, balances will remain with PayPal. This is not a situation where accounts are being selectively closed; rather, the Money Market Fund will cease operations in the manner approved by its board of trustees, and it will be de-registered with the SEC. So it will no longer be possible for anyone to continue to invest in shares of the Money Market Fund.


Will other similar products be offered by PayPal in the future?
We have no plans to offer a similar product at this time.

 

Will I still receive a 1099 at tax time for returns I’ve earned with my MMF in 2011?
Absolutely. You will receive a 1099 tax statement if you earn more than $10 in dividends in the 2011 calendar year. Your 2011 tax documents will continue to be available on the Fund Summary page in your PayPal account throughout 2012. Here’s how to access them:

  • Log in to your PayPal account.
  • Click Profile, then My Money on the left side of the page.
  • In the PayPal Balance section, click More.
  • Select PayPal Money Market Fund from the dropdown choices.


There are 2 ways you can receive a 1099 statement:

  • Paper statement:  If you signed up to receive a paper statement during the previous calendar year, you should receive the statement in the mail by mid-February 2012
  • Electronic statement:  You’ll have the ability to access your 1099 tax statement online in 2012 on the Fund Summary page in your PayPal account.
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12 REPLIES 12

NYSandy23
New Community Member

I just received a message from Pay Pal telling me that the Money Market Fund is closing.

 

Thanks for using PayPal and the PayPal Money Market Fund. Unfortunately, we’ve decided to close the Money Market Fund, effective 7/29/11.

What does this mean for you? PayPal will transfer any undisbursed dividends you’ve earned into your PayPal account within 7 business days after we close the fund. Don’t worry; you don’t have to do a thing.

Your 2011 tax documents will continue to be available on the Fund Summary page in your PayPal account throughout 2012. You’ll receive a tax statement from PayPal only if you’ve earned $10 or more in dividends in 2011.

Thanks for your understanding,
PayPal

Is this for real? There is no further way to contact people?

Anyone else get this?

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MelliAngel1980
New Community Member

I received that message as well.

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bransmom
New Community Member

I received the same message this morning.  Moments after Gmail warned me that someone in TURKEY has signed on my email account.  Change password immediately.  I changed email password and pay pal.  Hope this helps.  Not sure if money market is closing but it's better to be safe.

Thanks

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SilverLady
Contributor
Contributor

I wish they had updated the website BEFORE sending the email message...the help page that talk about the Money Market Fund are shown as "unavailable" and say they are being "updated." Also, I noticed that people are no longer able to enroll in the Money Market Fund via the website.

 

The email didn't provide any details. Funds sometimes close to new investors, or don't accept additonal deposits, but continue functioning with the moneys already invested. Will this be the case here? Or, will all funds simple cease to earn dividends after 7/29/11? I suppose we'll all just have to wait to find out until they get around to updating the website or sending a more informative email.

 

PayPal -- how about providing more information to your many clients?

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bgbadwlf
New Community Member

i also got the same email.  i called paypal and they requested i forward it to spoof@paypal.com

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CobraBob
Contributor
Contributor

It's a valid email.  I just talked to PayPal customer service.  Basically you will no longer earn interest on your account.  If you don't intend to move some of your money into, say, a bank savings account, then you do nothing at all.  You just won't earn any interest dividends.  I have no idea why PayPal has decided to discontinue the money market.  Not that interest earned on these accounts, on average, is anything much anyway.  Smiley Indifferent

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pazsion
Contributor
Contributor

If this happens, it will truely be the dumbest thing any bank could do.it's their biggest means of profits, #2 is fees..3 your money being in their banks And may be a sign of paypal attempting to close it's services entirely...or being forced too.. bad very bad.. I had been saving money to put into this account, pretty much because no other banking institution i've used, ever handled my money honestly...And addressed issues immediately, sometimes without me having to do anything... they protected my money... nobody else i have banked with did this.. paypal has been my bank for a long time!

 

Without a savings or money market account, that has a payment structure like they have had... I don't think i would have any reason to use paypal anymore..

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kbeerden
New Community Member

With the Money Market Fund closing why should I leave a dime in this account??? I have used this account as a second savings account and as a result have saved a few dollars. Can any one give me any good reason not to remove everything out of the account???????????? The E-Mail never stated WHY its closing????

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OnlineMerchant
Contributor
Contributor

I always remembered that the money market fund from paypal wasn't "insured". That meant, if things went bad, you could actually LOSE money. I don't think that ever happened in the history of papal with their money market fund, but that was a risk they always talked about. Maybe they are closing it because the interest is so low, and things are so bad, that this doesn't happen? Many would be furious if their accounts were debited and funds were taken OUT, instead of put in 🙂

Thoughts?

Also, found this interesting:

http://sunkcostsareirrelevant.com/2011/06/paypal-money-market-fund-closing/

and an old prospectus from 2005:

https://www.paypal.com/cgi-bin/webscr?cmd=p/gen/prospectus-outside

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