When it comes to finding a low-risk way to grow your savings, a money market account can be a valuable part of your financial portfolio. It can provide a solid, secure investment that helps you steadily work toward your saving goals. One important question you may have is: “Are deposits in money market accounts FDIC-insured?” To answer this, let’s be sure to distinguish between two products: money market deposit accounts and money market mutual funds.
The FDIC Difference
Money market accounts are often confused with money market funds, as their rates both tend to be tied to short-term, fixed income investments like U.S. Treasuries. The two types of accounts are also similar in that they offer relative liquidity and flexibility—subject to the standard federal transaction limits. You can usually write checks and make withdrawals from both money market accounts and money market funds. This can be especially helpful if you need to use your money for living expenses during retirement.
A critical difference between these two types of savings instruments is that deposits in money market accounts are insured by the FDIC (Federal Deposit Insurance Corporation) up to the maximum allowed by law at FDIC-insured banks. By contrast, money market funds are not FDIC-insured. So with these it is possible to lose some, or even all, of your principal.
Rest Assured With an Ally Bank Money Market Account
Ally Bank offers a competitive money market account rate with no monthly maintenance fees and no minimum opening deposit requirement. Because we are an online bank, we don’t have the overhead of traditional brick-and-mortar banks, so we pass the savings on to our customers in the form of great rates. And as an FDIC-insured bank, we are also able to provide the assurance of FDIC protection just like a traditional bank. Learn more at Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559).