What Is An Investment?
An investment is when you put your money to use by purchase or expenditure with the expectation of receiving more money in interest, income or appreciation as a result.
Sometimes there is risk involved (as when you invest in stocks, annuities or other non-deposit products). Sometimes there is little or no risk involved (as when you invest in CDs, savings accounts or other deposit accounts). Smart investment generally balances risk with reward and can vary greatly depending on how much money you want to invest and for how long.
It is important to note that some investments are insured by the FDIC and some are not. For information about what investments are and are not insured by the FDIC, click here.
Investing Your Money
Whether you choose to invest in stocks, mutual funds, CDs or something else entirely, it is important to protect yourself from making a bad investment. Below are a few things the FDIC suggests that you do before investing your money:
- Never invest in a product that you don’t understand.
- Be sure you have enough information before making an investment. Ask questions until you are satisfied.
- Understand the risks involved in your investment. Investments always entail some degree of risk.
- Know who is investing your money—does the salesperson work for the bank or a third-party broker/dealer?
- Select a sales representative who understands your financial objectives by interviewing two or three to compare experience, education, and professional background.