Financial Investment: The Safest Options

Here are the safest options in order of increasing riskiness:
1.  Checking Account
2.  Savings Account
3.  Certificates of Deposits (CD)
4.  Money Market Accounts (some)

Why are these the safest options?  They are FDIC insured up to $250,000 per individual per institution.  This means that if you have $250,000 in a savings account with Bank of America, $100,000 in a checking account with the same bank, and Bank of America fails, you only get $250,000 back from the Federal Deposit Insurance Corporation.
 
The first two options should be self explanatory.  A CD is basically a fixed-term loan to the bank.  These typically pay higher interest rates than savings accounts.  However, there is a penalty for early withdraw.  Only put money into a CD that you don't need within the fixed-term.

A money market account basically allows your money to be lent overnight to other banks.  You can generally withdraw your money at any time during banking hours.  These typically pay higher interest rates than if you are simply putt money in your mattress.

Bonds is the next post in this series.