Types of Investments

Investment is the process of risking one’s savings in the hope of a monetary gain. An investment involves the act of using a good or its money equivalent to create another good or fetch the returns of the invested amount in terms of interest or profit share. The basic purpose of an investment is to hold an asset in order to obtain recurring or capital gains. Take a look at the various types of investments.

Aggressive Investment: Aggressive investors invest in stock markets and business ventures. This type of investment can involve the act of investing in a real estate, renovating it, and renting it out. Aggressive investment involves a greater amount of risk.

Business Management: The value of the business assets is determined after which they are used to generate revenue. Business assets can be physical, financial, or intangible. Physical assets include property and machinery that is in possession of the business. Financial assets include the liquid assets of a business and the company stocks and bonds.

Conservative Investment: Conservative investors invest in cash. They put their money in investment accounts like savings, mutual funds, and certificates of deposit.

Economics: In context of economics, investment is the per unit time production of goods, which are not consumed and are rather used for production in the future. Tangibles like property, as also intangibles such as the costs incurred in on-the-job trainings are included in this type of investment. Income and interest rates form the determinants of an investment decision. A growth in income boosts investments while a rise in the rates of interest is not conducive to greater investments as it makes borrowing money costlier.

Finance: Investments in finance refer to the cost of capital invested in buying financial assets and securities. They include investments made in shares, bonds, and equities. Investments in the finance sector are made through banks, insurance companies, and other investment schemes. Learn all about the different types of insurance.

Foreign Direct Investment: When a company from one country invests in another country, it is known as foreign direct investment. This investment is generally of the physical form with the intent to build a factory in another country.

Investing in Gold: Investments in gold can be done through ownership or by means of certificates and shares. Here is a list of the types of gold investments.

Bar: Buying gold bars in one of the very traditional ways of investing in gold. It is practiced in Argentina, Austria, and Switzerland where gold bars can be purchased from major banks in these nations.
Coins: Coins, which are priced according to their weight, are purchased in this form of investment in gold. The British gold sovereign and the Swiss Vreneli are some examples of bullion coins.
Accounts: Swiss banks provide the customers with gold accounts which can deal in gold transactions.
Gold Exchange-traded Funds: In this scheme of investing in gold, gold can be traded on major stock exchanges.
Spread Betting: Firms in the UK offer spread betting in gold investments. Spread betting is about predicting the rise or fall in the prices of gold before investing in it.
Investing with the Mining Companies: Trading in the shares of gold mining companies is one of the means of investing in gold.

Investing in Silver: Investing in silver is similar to investing in gold. The various ways in which one can invest in silver are also the same as those for gold investments.

Land Investment: Land investment can turn out to be a long-term and rewarding investment if the purchased land is developed properly.

Moderate Investment: The investments made in cash and bonds and those which involve low or moderate amounts of risk, are known as moderate investments.

Personal Finance: Personal finance includes the money that is put aside on a regular basis with the aim of saving it. Mere saving of money involves only the risk arising out of devaluation of the saved amount due to inflation. However, saving money and investing it involves the investment risks like capital loss. Learn more about personal finance planning.

Philatelic Investment: The investments made in collectible postage stamps with the intent of making profits are known as philatelic investments. Rare stamps can serve as unique pieces of art and excellent collectibles. Investors dealing in stamps have chances of benefiting from the nation’s growing wealth. Know more about philatelic investment.

Real Estate: Investment in real estate is the one made in purchasing property. Property is purchased with the intent of holding or leasing. Residential real estate investment involves the process of buying other people’s houses while the investment in commercial real estate involves the purchase of a large property that can be rented to a company. Commercial real estate investment is riskier than that in residential real estate.

Socially Responsible Investing: This investment strategy aims at fetching financial gains for a social cause. Investors prefer investing in practices that promote human rights, equality, environmental awareness, and other social concerns.

Stock Investment: There is a rising interest among the masses for investing in the stock market. Stock investments can prove to be rewarding if share trading is done wisely.

Value Investing: It involves buying securities whose shares seem under-priced.

Investment is after all, the means to channelize money in order to secure one’s future. I am sure you would want to consult an efficient investment adviser for guidance on investing wisely.

Types of Bank Accounts

A bank account is a record of the financial transactions between the customer and the banking institution. The banking institutions have provided several types of accounts to cater to the needs of all sorts of individuals. One of the most important functions of banks is accepting deposits, which is aimed towards generating savings for the purpose of utilizing them in profitable investments. People, on the other hand, also prefer to deposit their savings in the banks, as they can earn interest and also avoid the danger of theft.

Though, the types of accounts offered can vary from one bank to another, here are some of the common bank accounts offered by commercial banks.

Checking Account

A checking account is also known as a current account or a transactional account. Money deposited in this type of account can be withdrawn at any time, as there in no restriction on the number of withdrawals and the amount of money withdrawn. Customers are generally given paper checks to carry out day-to-day transactions, like paying bills, making purchases, or transferring money to another account. ATM (Automated Teller Machine) facility is also provided to the customers. However, no interest is paid on the deposited money, and sometimes, customers have to pay a charge to the banks for rendering this service. This type of account is generally maintained by businessmen or concerns, as they have to make a number of financial transactions each day. A transactional account is sometimes called a demand deposit account, as no notice is required to withdraw money, i.e., money is available on demand.

Savings Account

Savings accounts are aimed towards mobilizing small savings from the general public. There are certain restrictions regarding the number of withdrawals and the amount to be withdrawn in a particular time period. However, money deposited in this account, earns a fair rate of interest. Though the customers can’t withdraw their money with checks, they can avail the ATM facility for the same. A passbook is also provided, which keeps track of all the financial transactions.

Money Market Account

A money market account is a type of deposit account, in which money can be deposited to earn a higher rate of interest than the savings account. However, a minimum balance is required to be maintained to earn interest and avoid fees. There is also a limit on the number of transactions that can be carried out in a particular month. The customers are usually allowed to make 6 withdrawals per month.

Certificate of Deposit

A certificate of deposit is also known as a time deposit or fixed deposit account. This account requires the customers to deposit a certain sum of money for a fixed time period. The money deposited in this account can’t be withdrawn before the date of maturity. However, some banks allow customers to withdraw money before maturity, by charging a penalty. The rate of interest paid on time deposits is usually higher than the other bank accounts. In addition to this, the interest paid on this account depends on the maturity period, i.e. longer the maturity period, the higher is the rate of interest paid.

Banking institutions offer several different accounts to satisfy the individual needs of their customers. These bank accounts enable the public to deposit their money in banks and thereby earn a monetary return.