Money market funds typically offer the highest interest rates and are available at some banks, according to Bankrate. While money market funds are low-risk, they do not offer the Federal Deposit Insurance Corporation coverage available with other bank accounts and it is possible to lose part or all of the deposit. Still, the funds are relatively safe as the bank invests the money in U.S. Treasury Bills and bank certificates of deposit.
Money market funds differ from money market deposit accounts that also offer higher interest rates than most savings accounts and provide FDIC coverage, according to Investopedia. Money market funds do not lock the money into an account for a set number of months, making them a good option for investing funds with the option of liquefying the investment quickly. They require an initial investment of $500 to $5,000.
The Investment Company Act of 1940 covers money market funds, and they have a history of providing safe investments. However, investors looking for bank accounts that offer comparable interest rates with coverage by the FDIC may want to consider certificates of deposit and money market deposit accounts. Several banks also offer FDIC-insured accounts online with comparable rates, according to Investopedia