401(k) – An employee-sponsored retirement savings plan that lets workers put an amount of their paycheck in a retirement account. Many companies will “match” certain amounts of what their workers elect to contribute, and the contributions are usually tax-deferred.
CD – A certificate of deposit is an amount of money a customer gives a bank that is insured, usually by the FDIC, with a fixed interest rate over a fixed term. The interest rates that banks offer on CDs are often higher because the money cannot be withdrawn at any time.
Money Market Account – A type of savings account, often with a high interest rate, reserved for larger-than-normal deposits. These accounts usually come with restrictions, such as how many transactions you can conduct per month.
FDIC – The Federal Deposit Insurance Corp. is a government insurance corporation that guarantees the safety of deposits in its member banks up to $100,000 per depositor per bank. It insures IRAs up to $250,000.
SIPC – The Securities Investor Protection Corp. is a government-mandated non-profit that protects investors from harm if a broker/dealer fails. The SIPC is inherently different from the FDIC because it does not insure investors if they take a loss in the market.