Story updated with a comment from a Prudential executive.
NEWARK, N.J.> (
has created a new principal and accrued interest guaranteed investment option for 401K products will be insured by the Federal Deposit Insurance Corporation (FDIC).
Carlos Mello, vice president, Prudential Retirement told
in a phone interview that Prudential has been selling the new principal and accrued interest guaranteed investment option products called Prudential ProtectionSM for a couple months.
"This product really grew out of the demand of the customer and Prudential's willingness to be a thought leader. We were seeing the demand for this type of product grow over the past two and a half years," Mello said. "The ability to apply for a product that has stability and is price guaranteed by the US government is attractive to many customers due to what has been happening in the economy."
The products are insured by the FDIC for up to $250,000 per participant, according to the press release. The funds that will be invested are considered deposits of Prudential Bank & Trust, FSB, which is a member of the FDIC.
Mello added that competitors such as
also offer FDIC-insured 401K products. Mello said there were no expectations for sales of the product.
"Will there be other FDIC-backed products?" Mello asked. "It is possible. This is part of a suite of products."
--Written by Maria Woehr in New York.
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