- 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.
- 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.
- 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.