My Business Educations Articles

For short-term savings:

Savings account - This is very often the simplest and most commonly used scheme that people invest in. While the returns are famously low, accessing the money is quick and easy.

Money market funds - A special kind of mutual fund these funds invest in very short-term bonds. They certainly offer better returns than do the conventional savings account but much less than what are called certificates of deposit.

Certificate of deposit (CD) - A specialized deposit that you are allowed to make either at a bank or at any other financial institution. Though the interest rate is typically the same as of other short-term bonds the interest is paid regularly till the certificate of deposit matures. When it does so, the original amount is repaid along with the accumulated interest payments.

The most attractive investing avenue for many is the stock market. Compared to other long-term investment tools, stocks have historically given wonderful returns on the money invested.

For long-term savings:

Bonds - Known as fixed-income securities, these are available in various forms. Issued either by the government or various corporations, they give a fixed amount of return every year.

Stocks - By far the most attractive and the most volatile of options, stocks actually allow individuals to own small parts of big enterprises. A single share of stock in reality represents a certain, proportional share of ownership for that individual in the enterprise. Though the value of the share you own rises and falls in accordance with how the value of the company changes, historically stocks have offered great returns on investment.

Mutual funds - This is a wonderful way for investors to pool their money to put in various investment schemes and at the same time distribute the risks with no one individual taking any disproportional risk. The advantage of mutual funds is that you do not have to manage your money; the fund manager who is usually a top-notch finance professional will handle your money for you.