Safe Money Investments

In financial terms, times are currently tough for many. During the current recession many have lost their jobs and are struggling. The big advantage of a savings account is that your money is safe. Up to that amount is guaranteed by the government, so it will not be lost. Bonds have a specific time to run, called maturity. Because it is a long term loan as such, it means the company has more freedom to do with it as they please. The longer the maturity period, the more profitable the bond should prove to be. This means you agree not to withdraw the bond until after this period it over. The reward (and risk) is potentially higher than a Saving Account though. The risk with bonds is that interest rates may rise, with the bond interest rising to a lesser level. As many are currently unwilling to “invest” as such, this is a way of keeping your money safe while earning a little interest. And with the fluctuating stock markets it may not be considered the best time for high risk investments.

The answer to that is no, unless you have over £35,000 in the account. It is somewhere to keep you money where you will not make a killing, but don’t risk loosing it either.3%) it means that you will be loosing out should interest rates rise above this amount. This means they will pay you more interest as a reward for allowing them to do this. They can use the money you have given them (the bond) to finance long-term investments. This has led to less people investing, for fear of loosing even more. Because you are receiving a set amount of interest (i.e. Savings Account will not make you a lot. So the question is, what safe investment opportunities are there? Again, like anything, low risk equals low reward. They are then obliged to pay you a specified amount of interest. In the current financial situation, you may be asking, what if my bank goes under? Will I then loose all my money? Bonds are another low risk investment option. The most obvious safe investment is to open a Savings Account at a bank.

This will mean that the bond will be less in real terms. When you purchase a bond, you are essentially lending it to the company who you bought it from. It may only be a little but it is better than not earning anything at all.