I want to put some money in a mutual fund to save for a home?

I was looking into INGDirect.com, because I already have a savings with them. However, when I was reading the details, I noticed that they note they are not FDIC insured. What does that mean? They mention it in a few places, and I am wondering if I should go with another back who IS FDIC insured?

FDIC is Federal Deposit Insurance Corporation. Only banks can insure savings and CD's. Mutual funds are stocks and bonds, so you cannot get insurance on that type of investment.
Pick a mutual fund that tracks the S & P 500. You will be owning the 500 largest and best companies in the US. While your investment is not insured, that is as safe as you can get.

FDIC insured is a good thing to go with because that means that in the case of a huge emergency your money would be safe. Huge emergency meaning a total collapse of the financial system like back in the Great Depression.

just go to this website.
http://www.morningstar.com/hp.html#A1

No mutual fund is FDIC insured, only bank accounts. A mutual fund is a giant pool of money from many investors that a professional funds manager invests to (hopefully) produce good returns.

There is potential for far more positive return that you will get with insured bank accounts but there is also risk that your investment could decline, especially in the short term. More return = more risk.

Great question. But I am almost hearing two different thoughts from you. You are writing the words mutual fund but seem to be talking about a money market. A money market is a special kind of mutual fund where the money manager seeks to keep the share price (NAV) constant at $1.00. There are definitely money market mutual funds that are FDIC insured. Calvert Funds offers one for example.

Somehow I get the feeling you are not really talking about a money market at all but a growth oriented mutual fund. If you would like to chat with me via email perhaps I can help you further. I am a professional investment advisor and my email address is richardjackel2000@yahoo.com

If you are saving for a house, you better invest in a good, safe, mutual fund such as Vanguard S&P500 index tracker.

Such funds have low charges and they do as well as the US economy as a whole. If they go down, they will always go up again, if you wait.

Look at vanguard or TIAA-CREF for long term, but for short term investing I love scottrade.com only $7 per trade. No fees for mutual funds and no annual fees. JD Power winners 9 times in a row. IMO we'll probably have a major market correction or even a bear sometime in 08 (57 month bull market) so I'd hedge your bets with CDs; bonds and other low risk investments.

It means you will lose all your money if they file for bankcruptcy.

No mutual funds are FDIC insured. Even if you get it from a bank that is FDIC insured, it is not. The FDIC insurance covers only the deposits at the bank, not the insurance or mutual fund products that they sell.

Not a good idea, mutual funds do lose money just like stocks.
For money that you plan to use in the near future, look at CD's or a money market accounts.

Mutual funds such as a S&P 500 from Vanguard or Fidelity are good places to put long term money that you won't be touching for 5 years or more, but in the short term they could go down or up dramatically. Assuming you want to buy a house in the next 5 years, stick with CD's or Money Market funds.