Balancing Rewards and Risks in Your Money Management

Grow Your Savings in Money Market Accounts

September 2012

Money management professionals will tell you that a smart personal financial plan requires spreading your money among different types of financial products with varying levels of risk, not "putting all your eggs in one basket."

For money management goals that require years or even decades—such as building a retirement account—you probably should be willing to take on more risk in return for greater potential reward. Some experts say mutual funds that invest in stocks and other securities could be a good choice for this part of an overall strategy.

But financial planners also recommend keeping some money in accounts that allow you to safely grow your personal wealth without much or any risk. Deposits in money market, savings accounts and other FDIC-insured accounts fit into this part of the financial equation.

Online banks such as Ally Bank are able to pay some of the most competitive money market account rates available because they don't have to maintain physical facilities. Accounts like the money market savings are likely to grow at a more modest pace than you may see from riskier options. However, deposits in money market savings accounts and other such bank products are more secure against losses.

"Every portfolio needs a component that helps to stabilize returns and protect the consumer from excess volatility in the markets. Money market [accounts] fit into the lower-risk part of that portfolio," said D. Scott McLeod, a senior financial planner with Charles D. Haines, LLC, in Birmingham, Alabama, in a recent interview with Ally Bank.

This is particularly true of the Money Market Account at Ally Bank, where your deposits are FDIC insured up to the maximum allowed by the law. There is a difference, however, between money market accounts and money market funds.

In a recent interview with Ally Bank, Bert Whitehead, president of the financial planning firm, Cambridge Connection, Inc., in Franklin, Michigan, compared money-market funds and accounts: "From the standpoint of profits they're about the same. There probably isn't much risk with either, but funds aren't [FDIC insured]."

With some of the most competitive money market account interest rates available anywhere, Ally Bank gives you more than a few reasons to love your bank. Learn more at or call live, 24/7 customer service at 877-247-ALLY (2559) today.

Related Articles