BANKING, INVESTMENT & SAVINGS : If you are still unknown about the knowledge of banking and investments. Then, you must take certain initiative to achieve a secure future in your life. Just merely having a basic idea about banking and investment is not enough in this changing financial conditions. You must possess some financial market knowledge which can take you one step ahead to achieve all your dreams. Let’s discuss about some of this in detail below about BANKING, INVESTMENT & SAVINGS
Most of us know about the bank and its role in our daily life. We know that in order to better manage our financial life; we should have both a checking and savings account at a minimum. A bank is a commercial institute that deals with cash deposits, providing credit, and other financial activities. Banks is a secure place for extra cash and credit. This institute provide savings accounts, certificates of deposit, and checking accounts. On the other hand, Banks utilizes such deposits to offer loans to its customers. Bank loans include home mortgages, business loans, and car loans. All these activities conducted by banks are called banking.
Bank: how it works?
Banks are a safe place to deposit excess cash. Banks are only required to keep 10 per cent of each deposit on hand. That regulation is called the reserve requirement. Banks lend the other 90 per cent out. They make money by charging higher interest rates on their loans than they pay for deposits.
Different Types of Banks
- Commercial banks offers services to private individuals and business bodies. Retail banking offers credit, deposit, and money management to individuals and families.
- Community banks are quite smaller than commercial banks. These banks concentrate on the local market and small scale industries. Community Banks more personalized service and build relationships with its customers.
- Credit Unions provides lowest fees and loan rates because it is a non-profit organization. Earnings are paid to the members at the end of every year.
BANKING, INVESTMENT & SAVINGS
Internet banking is one of the revolutionary services of banks. Internet banking is also known as E-banking, online banking, and net banking. Most of the banks now offer online services. Moreover, there are various online banks. These banks don’t have any branches, they can pass cost savings onto the consumer. Some of the online banks like Ally Bank, ING, Synchrony, and Discover.
Investment banking finds funding for corporations through initial public stock offerings or bonds. They also facilitate mergers and acquisitions. Third, they operate hedge funds for high net worth individuals.
Investments is one of the most important aspect in financial market. It is a truth that just earning money is not enough. You may be working hard to earn some money. But this is not sufficient for you to lead a comfortable lifestyle and fulfil your dreams. To achieve it, you have to make your money utilize properly. For this purpose, most of the people opt for investments. Just merely keeping Money idle in your bank account is like losing a great opportunity. Every person should invest that money smartly to get good returns out of it.
Types of investments
Every investor has a different type of investment scheme that gives them a higher return as comparing other schemes. There are some old investments schemes that have been done over a period. There are some new schemes that have been introduced for the welfare of investors. Let’s discuss some investments types:
Stocks is one of the premier investment schemes, which is also known as company shares. Buying a company’s stock is just like getting ownership rights in that company, which enables you to take part in the company’s development. This type of investment is offered by companies that can be made through listing on stock exchanges. This type of investments are generally long-term in nature. Moreover, it’s a kind of risky activity on investments.
Mutual Funds is one of the best investment schemes that has been initiated in the past few decades. MF takes investments from potential investors and put it in a way to earn maximum returns. There are different types of Mutual Funds in the financial market. Equity Mutual Funds are invested in equity-related funds, whereas debt mutual funds are put in bonds and commercial papers. There are some other mutual funds that are invested both in equity share and debt. This type of investment is flexible in nature, which can be initiated and stop as per the investor’s convenience.
Fixed deposits are an investment tool that is for a specified time period. This type of investment offers complete capital protection and guarantee returns. This type of investments is best for those investors who don’t want any risk factor. FDs are offered by banks with different time periods. The rate of interest in fixed deposit change as per economic conditions discretion of the banks. Fixed deposits are also known as locked-in investments, where investors are allowed to take loans and overdraft facilities.
A recurring deposit (RD) is one of the convenient investment that enables an investors to put certain amount every month for a period of time. RD is offered by many banks and post offices in India. The rate of interest is determined by the institution. Recurring Deposits allows the investor to put up a small amount every month to build a specified amount over a defined time period. RD provides capital protection and guaranteed returns.
Public Provident Fund
The Public Provident Fund (PPF) is a reliable investments option which is a long-term tax-saving tool which can be invested for a period of 15 years. Investments in PPF can be utilized for getting a tax relief. PPF rate is decided by the Central Government in every quarter. It also allows loans and partial withdrawals to the PPF investors after certain conditions that are needed to be met.
Employee Provident Fund
The Employee Provident Fund is a best investment option which are a retirement-oriented investment tool which also has a benefit of Tax break. EPF deductions are typically a part of an employee’s monthly salary and the same amount is contributed by the employer as well. Upon maturity, the maturity amount from EPF is entirely tax-free. EPF rates are also decided by the Central Government every quarter.
So from all these information you must have gained all the details about different banking strategies and various investment schemes that can stimulates your earning with time. Moreover, it also gives an opportunity of future plans and settlements. So, choose wisely before making any investment and opting for a secured bank that can benefit you for a longer period of time.
Hope you get some idea about BANKING, INVESTMENT & SAVINGS and for more details on each please go through the other related articles which mentioned in this blog.
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