To make an investment, is to put money into an account with the intention of receiving a return/profit in the near future. Simply put, to make an investment means owning an entity or an object with the intention of making money from the appreciation or the increase in the value of that entity over a certain period of time. Investments in stocks and property are popular because they offer higher rates of return (sometimes much higher than the returns on most other investments). The difficulty is to know what to look for as there are many different investment strategies available.
One of the best investments over time is bond and certificate of deposit (CD) buying and selling. They offer a higher rate of return, which is why so many investors choose them. Certificate of deposits are tied to a specific financial institution. The certificates contain a list of all the depositors along with their particular deposit number.
Another low-risk investment option is in the money market. Money markets offer extremely low returns but, they are a short term investment strategy and, therefore, should only be used for very important purchases and not to plan for long-term investments. A money market investment is considered a high-risk vehicle. You will need to have substantial cash available when investing in a money market. You can also use a certificate of deposit for this type of investment.
A bond is another common low-risk investment. These also offer low-risk returns but, the returns tend to be lower. Although, the returns are lower, some people consider bond investing a good long-term strategy. A bond pays a fixed amount each month and, usually, it is fixed for a certain number of years.
CDs are also popular low-risk investments. CDs are designed as an income investment. Interest on a CD does not fluctuate because the interest rate is set for a set period of time; the longer the period of time, the lower the interest rate. Because of this, the returns on a CD can be assured. Unlike some other types of bonds, you do not have to worry about minimum distributions.
Most commercial banks offer a variety of investment options to their customers. In general, the more traditional investment types you look for, the better. However, if you are looking for something a little different from what you’re probably familiar with, i.e., stock investments and bonds, then you will certainly want to consider some short-term fixed interest investments to help you generate a little extra income.