With the stock market still unusually turbulent, many in the Omaha area are turning to the safety of bank accounts with a guaranteed return – including high-yield savings accounts and money market accounts. These types of accounts help protect your savings in two ways: (1) they are types of savings accounts and thus are FDIC insured up to $250,000; (2) instead of being subject to the whims of the stock market, like your 401(k) or IRA account, high-yield savings accounts and money market accounts earn a steady, guaranteed return. But what exactly are these accounts?

A “high-yield savings account” is just a fancy name for a regular savings bank account. The “high yield” part means the bank is offering a competitive or above-average rate of interest; however, given the turmoil in the current economy, this rate is likely to still be quite low. Many of the banks that offer high-yield savings are “Internet banks.” These banks have very few bricks-and-mortar branches, and, instead, their customers do their banking via the Internet. The reduced overhead costs allow these banks to offer a higher interest rate on their savings accounts.

A money market account, like a high-yield savings account, offers a higher than normal rate of interest. The difference is that in a money market account, the bank is investing your money and collecting the return; to compensate you, the bank gives you a higher than normal rate of interest.

There can be some limitations to these types of accounts. Banks may require a minimum initial or ongoing deposit in order for you to have such an account and qualify for the premium interest rate. There can also be restrictions about how many withdrawals you make from these accounts per month, and it can take several days to access money deposited into these accounts. That said, these drawbacks may be worth it for the safety of an FDIC insured account with a guaranteed rate of return.