It depends on your personal return goals and your risk tolerance. A $1,000 investment in stocks might achieve a return higher than the Market Savings program, but if the equity market declines, you may lose a substantial part of your principal. With the Market Savings program, your deposit is FDIC-insured,† and your investments will utilize sophisticated investment approaches that allocate across several asset classes in seeking to provide stable returns over time, and dividends paid out by the ETFs in the portfolio are reinvested automatically.
Even if these investment strategies in your Client Account lose money, your deposit is not affected. Your Market Savings deposit is placed with Webster Bank, N.A., Member FDIC, and is not encumbered, collateralized, or put at risk. Save does not utilize your deposit for anything else aside from placing it with Webster Bank, N.A., Member FDIC,† to ensure capital protection.† Independently of your deposit, Save will make an investment on your behalf based on your portfolio allocation. Furthermore, as of December 2022, the expected APY of the Market Savings 5-year term is around 9.15% per year,* while the S&P 500 has achieved about 6.3% annualized return from the start of the century up to June 2022, including dividends.
*Generally, an APY (or annual percentage yield) is the yearly return on a bank or investment account. Save Market Savings is a hybrid product and service that includes deposit account linked to an investment product. The deposit account portion of the Save Market Savings product and service is provided by Webster Bank, N.A., Member FDIC; and is non-interest bearing with a 0% APY. The investment portion of the Save Market Savings product and service offers the potential to earn an APY with a variable rate (Variable APY). The Variable APY, if any, is derived from the investments made by Save on behalf of the customer within Save’s portfolio of strategies over the duration of term length selected by the customer. The Variable APY, if any, will be equal to the cumulative return for the investments selected for you by Save for the term selected on the applicable maturity date. The Variable APY may be 0% but will never be less than the Minimum Variable APY of 0% per annum. Assuming a minimum Variable APY of 0% per annum, if the Variable APY applicable to a particular maturity date is less than or equal to the Minimum 0%, the customer will not receive any Variable APY return for that investment upon maturity. Variable APY’s are subject to change at any time. Variable APY is not guaranteed. The Variable APY presented is hypothetical in nature and reflects the potential growth that could accrue if the investment is held for the entire term selected. Variable APY’s are based on hypothetical back-tested performance in the Save Moderate Portfolio from 2006 to present and are shown net of fees. Hypothetical back-tested performance is no guarantee of future performance and actual results will vary. For more detailed information please see Hypothetical Back-testing.