Medical Info

Like other investors around the United States, banking and investment customers in metropolitan Indianapolis are looking to protect their savings while still earning a reasonable rate of return. Faced with shrinking balances in their 401(k) accounts, declining home values, the possibility of layoffs and the frightening instability of the banking system, many people are looking for guaranteed safe investment choices, regardless of their rate of return. Money market accounts and high-yield checking accounts are two options for this type of investor.

You may not have previously heard of money market accounts or high-yield checking accounts. A money market account operates similarly to a traditional savings account. To help clarify, let’s first explain what the “money market” is. The money market is simply a general term used to describe the market where banks and financial institutions interact to lend, borrow and exchange currency, Certificates of Deposit and other financial instruments. A money market account is a specific kind of savings account that earns higher than average interest. Money market accounts can be opened quickly and with little hassle at almost any physical bank and often at online banks, as well. Similarly, a high-yield checking account operates just like a regular checking account, but earns a higher rate of interest.

The money you save in money market and high-yield checking accounts will be invested, but the investment is made on your behalf by the bank, which then collects the return. These types of accounts are insured by the FDIC. Because they are insured by the FDIC, money market accounts and high-yield checking accounts are just as safe as standard savings accounts.

Because money market and high-yield checking accounts earn a higher rate of interest than standard checking or savings accounts, there is often a minimum deposit to open these types of accounts, and they may have some restrictions on what ways and how frequently you can access your money. Many online savings banks, however, have low or no minimum balance for these types of accounts.

Because it offers an FDIC-insured and guaranteed return, many Indianapolis residents are turning away from other investments and are shifting their money to the safety of money market accounts or similar high-yield checking accounts.