Homes Lowry Horn and Johnson Ltd logo

A Professional Corporation

Certified Public Accountant


3998 Fair Ridge Drive Suite #360, Fairfax, VA 22033-2907


Phone: 703-281-4880

Fax:     703-281-4522



November 2019

When Safe is Best

When Safe is Best

When investment markets are volatile or declining, investors and savers flock to more predictable, less volatile instruments like money market mutual funds, bank money market accounts and bank Certificates of Deposit (CDs). But these savings and investing vehicles are not the same.


CDs are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per person, may pay the highest interest rates of the three and are less liquid than money market alternatives. The longer the term, the higher the rate you’ll get in return. A CD can be a good spot to earn a few dollars for a short period of time, but beware of early withdrawal penalties.


Backed by the FDIC as CDs are, a bank money market account may offer different levels of interest rates depending on the balance you maintain. This account may restrict how many checks you can write per month, and it usually pays a lower rate than savings accounts in exchange for more flexibility. This can be a good parking spot for emergency funds that need quick access.


A money market mutual fund pays interest, but could have higher fees than its alternatives. No mutual fund has the benefit of the FDIC’s $250,000 guarantee per depositor, per insured bank, for each account ownership category. While mutual fund companies try to maintain money market share prices at $1 a share, they can lose principal. They may, however, allow lower minimum balances and fewer check-writing restrictions than bank money market accounts.


A savings account may be best for immediate access to all of your money, but if you want to earn a little more, you might consider the two money market alternatives.


Enter your Name and Email address to get
the newsletter delivered to your inbox every month.


Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.

The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.