Investment options are always numerous and many of them are available to owners of capital and those wishing to operate their money, ranging from personal investment to joint and group investment, investment through intermediaries and brokerage companies of all kinds, or investment through banks, which we will learn about in our article.
As with all other forms of investment, investing money in banks has its drawbacks and positives, and some may find it the most suitable investment option for them, while others do not appeal to others for one reason or another, here we will learn in detail about this investment form, and all the information that helps you determine if it suits you. or not.
Investing money in banks
There is not only one form of investing money in banks, but there are many forms that can be relied upon in investing our money, and here are the most prominent of these forms and the characteristics of each.
Investment portfolios were created for the purpose of diversifying investments in the first degree, as it means investing the capital allocated to the portfolio in many forms of investment and avoiding reliance on one form of investment, with the aim of reducing risks and diversifying assets.
As you can find in a single investment portfolio real estate investments, investments in stocks, commercial assets and bonds, and therefore in the event of a loss in any of these investments, the loss is limited to a part of the capital only, and not as it is when the investment is in one type as the possibility of loss increases.
Investment portfolios are not exclusive to banks, as a person can form his own investment portfolio if he has the knowledge and experience necessary for that. But in most cases, and due to the multiplicity of skills and knowledge required to operate and manage the investment portfolio, the matter is supervised by the bank and with funds from other investors in the form of external parties, so investment portfolios are one of the forms of investing money in banks.
It is one of the bank accounts that are designated for capital owners for the purpose of investing their money through banks and in different areas defined by the bank, and the owner of the capital has no right to interfere in it, and these accounts can be an investment deposit or any of the other names that banks usually use for this type Accounts.
The returns from these accounts vary according to many factors, including the amount of the invested amount, the form of the investment, in cases where there is an investment bank deposit, and the term of the deposit may contribute to determining annual or periodic profits, as deposits that are for long periods have more returns than deposits in short periods.
Also read: Before investing your money in it 5 questions that explain everything about bank deposits
Some call it savings certificates, and it is a form similar to the previous type of investments made available by banks in different forms and varieties to meet all limited and large investment needs, and even those investments that are directed to small savers and those who have limited amounts who wish to provide them.
Investment certificates are a certificate that is purchased from the bank for a limited amount and period in return for a return that may be monthly or annual, or even a deferred return until the expiry of the investment certificate period, i.e. the owner of the certificate receives the returns at the end of the certificate period.
The advantage of investment certificates is that the holder of the certificate can recover the full amount of the value of the certificate that he had paid when purchasing the certificate, which can be retrieved upon the expiry of the certificate’s period. Of course, this is in addition to the profits that he may have achieved throughout the term of the certificate.
As for the profits that can be achieved from this type of investment, they vary according to the value and duration of the certificate, and they increase the longer the certificate lasts and the higher its value. You can learn more about investment certificates from this article.
It is an investment product similar to the first type that we talked about at the beginning of this article, but investment funds are limited to banks only and are on a wider scale in most cases in terms of value and investments and their diversity. In addition to the types of investments that you can find in addition to specialized funds, such as funds specialized in mineral investments, funds specialized in technology investments or other areas.
Any of the capital owners can search in banks for the available forms of investment funds and choose between them to invest money in them, some funds have special conditions for investment in them, and of course all funds are managed by banks and with professional departments with experience in the field of investment business.
Also read: Mutual Funds … What Are They? How do you choose the right fund for you?
How do you choose the appropriate investment form for you?
Any of the aforementioned investment forms fall under each type of many branches and shapes. For example, investment accounts, you will find many types, which differ according to many factors such as duration, amount value, returns, and collection period for returns, and will the account be in the form of an investment deposit, savings deposit, or term deposit, for example.
The same applies to investment certificates, portfolios and investment funds, which makes the selection and comparison process between these forms not an easy thing for capital investors who are looking for a suitable investment option.
In order to choose the most appropriate investment form, you should think about all of these matters, in addition to the conditions and laws under which the bank operates, in addition to your own circumstances. If you are ready to invest in a long term and will not need your capital for a short time or in any emergency situation that occurs with you then it may be appropriate for you to consider a long-term investment option that achieves more good returns than short-term investment options with limited returns.
In cases where you do not have a lot of money, and you plan to invest your savings, for example, it is better for you to invest in a more flexible option that allows you to get your money at the time you want, in anticipation of any emergency circumstances in which you may need your money urgently. Long-term investment deposits will not be able to get your money from them until after the end of the deposit period, and the same is true for long-term investment certificates.
On the other hand, the more flexible investment options that allow the owner of the money to obtain his capital at any time are of limited return and often with little profits. Therefore, it is necessary to inquire well and learn about the various forms of investing money through banks in the beginning and take your circumstances into account, in addition to the bank’s laws and conditions for investing in it, so that you can choose between them and determine the most appropriate investment form for you.