Posted By: Abigail
-Beware of "When a Bank Guarantee ISN'T...." - 03/12/12 04:47 PM
-BEWARE of "When a Bank Guarantee ISN'T-"
With CDs and highyield savings accounts paying out measly income these days, banks are happy to suggest alternatives that earn more, including bond funds and dividend-paying stock funds. But just because you're investing at your friendly bank doesn't mean your investment is guaranteed. Only bank deposits--CDs and savings, checking, and money market deposit accounts--are federally insured. The very nature of those short-term investments is that you're guaranteed to get back what you put in, plus interest.
But banks can also sell you stocks and bonds, mutual funds, and ETF-s. These investments have no federal guarantee--and they could lose value when the markets hit a rough patch.-
--C.F