The popular and common way of saving your money is through saving bank account and the certificate of deposits as they are the safest and there is no risk in investing through these modes. The drawback of these investments is they do not give more returns and thus you can just save and cannot increase your quantum of investment speedily. Thus many investors go for the financial investment. Those who does have idle money can invest them in stock market as well as in funds. These are generally called financial investment. Some major types of Financial Investment are as follows:
Source : kiplinger.com
When person invests in the stocks he becomes the owner of the company or owner of asset of companies, thus it is beneficial to investor in creating in the wealth. Investor will also earn dividend if the companies does well and the investor can sell his stocks in the profit. Similarly if the company works poorly then the price of stocks falls resulting in loss to the investor.
Source : naukrinama.com
The bonds are the certificate of debt issued by the government or any company with the promise to pay the principal amount with the interest specified there in. bonds have the specified period prescribed at the time of investment. The term of the bond may vary from no of months to 30 years. These are the instruments which can be traded and generally they are safer than the stocks and do not contain any risks. The bonds are safer in the way of payment also as if the company becomes bankrupt then the bondholders will be paid first than the shareholders.
- Mutual Funds:
Source : openthemagazine.com
Mutual funds are the type of investment which are the collection of the stocks and bonds we can say that the mutual funds are the kind of the investment in which the investment shall be done in a passive manner as the funds are managed by the professional manager. Mutual funds usually are investing into the specified investment category only. There are many types of the mutual funds available as diversified in the investment like they invest in
shares, bonds, and also in the diversified investment plans. Also the risk factor is involved in the investment in the mutual funds as per the plans thus some of them will have low risk and some will be with the high risk.
Source : valuewalk.com
Annuities are the plans which are provided by the insurance company to provide the part of money at the regular interval of the time mainly after achieving the specified age or after the retirement. Firstly in the phase of investment the person needs to collect the money and then it will be accumulated with the service provider and after the phase of investment is over the money collected will be returned to the person with interest. Also the benefit of funds invested is available to beneficiary if the investor dies before maturity of the term period.
Thus to get better appreciation of money it is recommended that one should invest the idle finance in the above mentioned types of financial investment rather than keeping it idle losing opportunity to get higher returns.