How_Money_Works_-_The_Facts_Visually_Explained

Earning income from savings

Putting money into savings accounts and fixed-term deposits is low-risk,

making them safer options for wary investors. But investors also need

to consider if their money is likely to “earn” enough income to live on.

Which savings or deposit account?

All investment products offer a trade-off between risk and return, and savings

or deposit accounts are no exception. As a rule, such investments carry the

least risk, but the downside is that they may not provide a very good return;

the products with the best return tend to be the most risky. New products

such as peer-to-peer lending show the strongest potential for gains.

❯❯Low return,

low risk

❯❯No minimum

investment

❯❯Cash can be

withdrawn on

demand

❯❯Low to medium

return, low risk

❯❯May require

minimum deposit

❯❯Cash withdrawals

must be arranged

in advance

❯❯Low to medium

return, low risk

❯❯Higher interest

rates, but with

restrictions

❯❯Significant deposit

needed to earn

decent income

❯❯Low to medium

return, low risk

❯❯Fixed interest rate

❯❯Cash not instantly

accessible as held

for fixed term

(from one month

to five years)

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INSTANT ACCESS
SAVINGS ACCOUNTS
NOTICE SAVINGS
ACCOUNTS
MINIMUM MONTHLY
DEPOSIT ACCOUNTS
CERTIFICATES
OF DEPOSIT
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US_166-167_Interest_from_Savings.indd 166 13/10/2016 16:20