No-Risk Bank Investment Accounts 101

Do the bouncing numbers for the Dow Jones scare you? Do you want to ensure the nest egg you’ve built up over the years is safe from any stock market uncertainties? Or maybe you have future plans for your money and just need a safe place to park it while it earns a little interest.

For those new to no-risk bank investments, below is a quick primer to help get you started thinking about options. These are options guaranteed to not lose you any money. (However, you should always speak to one of our professionals for information and advice on your specific saving goals. Everyone’s circumstance is unique, and we’re here to help.) Below are a couple quick notes on each type of account and a chart at the bottom for your reference:

 

Certificate of Deposit (CD)

Similar to savings accounts, these are federally insured through the Federal Deposit Insurance Corporation (FDIC) to up $250,000 per customer, and are virtually risk-free. Unlike savings accounts, CDs have a specific fixed-term and a fixed-interest rate. So long as you hold the CD for the prescribed amount of time (aka maturity), you can withdraw the original amount plus accrued interest.

Standard Bank offers both regular and special CDs a variety of terms; however, all rates are fixed at the time of purchase and guaranteed through the life of the CD, further insulating you from the ups and downs of the stock market. The main difference are the maturity dates, ranging from 3 months up to 12 years. In general, the longer the term of the CD, the higher the interest rate you’ll receive back, with interest that is compounded daily.

However, with a little creativity, our specials can be really unique and are customer driven. They evolve as our customer demands evolve, so always check back to see what we’ve cooked up.

 

Individual Retirement Account (IRA)

Already have a nest egg you’re trying to protect and maybe even ‘fluff’ a bit? An individual retirement account (or IRA) is a good way to round out your retirement savings portfolio without the worry or fear of it disappearing overnight.

Standard Bank offers both Traditional and ROTH IRAs. Each come with specific tax benefits, age and income requirements, and early-withdrawal penalties. Because these accounts are very specific to the needs of each holder, we recommend speaking with one of our associates and your accountant for an effective game plan.

 

Insured Money Market Account

Maybe you’d like the value that money market accounts can provide as another investment alternative. With multiple tiers of variable interest rates based on your balance and daily compounding of interest, you can benefit from yields higher than typical savings accounts. Money markets are a liquid account, meaning you can withdraw money at any time without penalty. Therefore, this account also features the option of a Standard Bank ATM card with up to six monthly check withdrawals or transfers per month.

Insured money market accounts require a minimum $2,500 to an account and an ongoing balance of $1,000 to avoid a monthly service fee.

By the way, don’t confuse these accounts with money market funds that are not FDIC insured and are opened through brokerages, such as Standard Investment Services.

 

Savings Account

Depending on your needs, it’s possible a good old-fashioned savings account will serve you best. Standard Bank offers a variety of savings account options with little or no minimum balance requirements. Savings accounts are also liquid accounts where you can withdraw/transfer your money up to six times per month online (per government regulation), but offers unlimited withdrawal s for in-office transactions. You can, however, ADD as much as you want, as often as you want.

Look for savings accounts that compliment your checking account—sometimes opting for a banking relationship with linked products can offer you more perks or better rates.

 

What’s NOT Insured: Wealth Management

Just a reminder, bank investment options are different from Wealth Management and stock or insurance investment products. While Standard Bank offers those services as well through Standard Investment Services, they are different because they may carry the risk to either gain or lose money as outside markets fluctuate. Wealth Management products are far more complex, so we advise you to meet with a trusted financial advisor to determine what products or services will help you achieve your investment goals.

 

Your bank investment account cheat sheet: