Insured funds, guaranteed returns: Deposits offer investors calm in turbulent markets

With volatility in the stock market making daily headlines, the security and reliable returns of insured deposits are an increasingly appealing option for both savers and investors.

According to the Wall Street Journal, high-net-worth individuals are turning away from traditional deposit accounts to savings products that offer higher returns, like high-yield savings accounts and money market deposit accounts.

High-yield savings products differ from stock market investments in a few key ways, including one of the most important: federal deposit insurance.

When you open an account with a federally insured financial institution, you can be confident that your money is safe up to the insured limit — generally up to $250,000 for individual accounts and $500,000 for joint accounts, per insured institution.

Ben McLaughlin, president of Raisin US, points out that “high-yield savings products have become very attractive recently — where else can an investor get a guaranteed yield of over 5% with principal protection? We are seeing many investors come to our platform to limit their overall portfolio risk with a diversified suite of high yield savings products to maximize their deposit insurance coverage depending on the amount of money they have”

With a savings platform like Raisin, which partners exclusively with insured financial institutions, you can access savings products from over 60 banks and credit unions all with one login. With no account maintenance fees and an easy-to-use online interface, it’s never been easier to spread your deposits and get the most out of per-institution deposit insurance.

With their current suite of insured institutions, Raisin provides customers with the opportunity to get millions of dollars covered by federal deposit insurance by spreading your funds amongst our growing number of partner institutions. Just keep in mind that insurance limits include all deposits you have at a given bank or credit union, whether through Raisin or otherwise.

While returns on deposit products have typically been lower than those on stock market investments, current market volatility coupled with interest rates at their highest in decades, the calculus may have shifted.

Raisin partners with banks and credit unions to offer exclusive rates and products, allowing customers access to some of the best rates for insured deposits on the market. If you’re concerned about longer-term instability in the stock market, a certificate of deposit might be the right option for you.

With a high-yield certificate of deposit, you won’t need to stress about daily dips in the market. You choose to deposit an amount of money and commit to leaving it there for a set period of time. In exchange, you lock in an interest rate for that entire term.

This means that you will be able to calculate exactly how much interest you will earn. This sort of guaranteed return is all but impossible on the stock market.

“Raisin's partner banks are offering certificates of deposits with rates as high as 5.30% APY,” McLaughlin added, referring to rates on the Raisin platform as of April 24, 2024.

Alternatively, a no-penalty CD offers similar guaranteed returns with the ability to close the account without any early withdrawal fees in case you need your money before the term is up. As of April 24, 2024, rates for no-penalty CDs were as high as 5.15% APY on the Raisin platform.

Stocks listed on stock exchanges are generally considered to be a liquid asset. If you’re interested in maintaining that liquidity without the stress of market fluctuations, a high-yield savings account or money market deposit account could be the right solution.

With these accounts, your funds are held at a competitive interest rate. For instance, on Raisin this often means a rate 10 or more times the national average rate — with no fees, no limitations on deposits or withdrawals, and just a $1 minimum deposit to open an account.

While the rate may change over time, rate shifts are generally less turbulent than the ebbs and flows of the stock market. Plus, high-yield savings accounts or money market deposit accounts are considered some of the most liquid assets available.

Whether you’re looking for a short-term break from the stock market and want a competitive rate with high liquidity, or you’re looking to lock in a guaranteed return for a longer period of time, Raisin likely has a product that suits your needs.

Plus, every single one of the products offered on Raisin comes with federal deposit insurance, up to the institutional limit. That’s a level of reassurance and security that stocks are just unable to offer.

Click below to view current offers and find one that’s right for you.