A certificate of deposit is a low risk investment and gives higher returns than saving accounts. It operates by taking a certain amount as investment for a fixed period that can be anything from one month to even more than five years. CDs are issued by banks and the Federal Deposit Insurance Corporation (FDIC) insures them up to $250,000, which means they come with a guarantee from the U.S. government. [Read more…]
Investment Alternatives to Mutual Funds
Those days when investors could blindly stack their cash in mutual funds are behind us. The returns from mutual fund investments have gone down and various other investment options have emerged that look much better. Many retail investors seem to have ignored this fact and they are still not moving their cash from mutual funds to other areas. [Read more…]
Low Risk High Return Investments
Whenever interest rates drop, people look out for investments with higher returns and low risks. But it is important to remember that all options that will offer higher returns will also involve relatively greater risk.
Take for example, reverse convertible notes or revertible notes, which are financial instruments with returns tied to a stock value. These instruments offer a higher rate of return, but if the stock value drops, you can suffer significant losses. In some cases, even the principal amount might not be recoverable. Yet another example is investing in a bond fund where you run the risk of losing your investment when the interest rates increase. The risk will increase with the term of the bond. [Read more…]
