Investment Options

Savings Accounts

  • Often the first banking product peopel use, savings accounts earn a small amount of interest.
  • You can take your money out at any time without penalty, so a savings account is a very liquid asset, meaning it can be easily converted to cash.

Stocks

  • A company usually begins issuing shares of stock to raise money for reasons such as buying new equipment or hiring more employees.
  • Over long periods of time stocks tend to make more money than income investments.
  • There's no guarantee you'll make money.

Collectibles

  • Investors in collectibles don't make a profit or loss until they sell their items.
  • There's a very small market for collectibles, investors view them as very high in risk.

Real Estate

  • Investors buy property, such as land or buildings, hoping to generate a profit.
  • Real Estate is easier to sell than stocks; you have to put it on the market, wait for a buyer, negotiate the price, and then sign a contract.

U.S. Savings Bonds

  • The federal government pays interest to investors for loaning it money. (Just like banks and credit unions.)
  • A bond is a formal agreement where the borrower, in this case the federal government, can use your money for a set period of time and you, as the lender will get paid a specific amount of interest in return.
  • You agree to let the government borrow your money for at least a year.
  • Bonds can be held for up to 30 years.
  • You can buy government-issued U.S. savings bonds from almost any financial institution or directly from the government.