How_Money_Works_-_The_Facts_Visually_Explained

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PERSONAL FINANCE

Investments for income

How it works

Savings accounts and fixed-term deposits traditionally

provide a guaranteed return with little of the risk

associated with more volatile investment products

such as shares or managed funds. However, when

interest rates are low, it can be hard to find a savings

or deposit product that offers high enough returns to

❯❯Medium to high

return

❯❯High risk, but some

banks offer FDIC-

insured accounts

❯❯High interest but

high deposit and

often limited term

❯❯Medium to high

return

❯❯Advantage of

tax saved on

certain types of

bonds, which

means earnings

not depleted

❯❯Medium to high

return

❯❯Can be high risk,

but some banks

insure deposits

❯❯High interest rates;

some funds

reinvest interest

❯❯Medium to high

return

❯❯Medium risk, but

strong potential

for gains

❯❯Provides capital

and interest

payments

provide a decent income. Many investors use

fluctuating interest rates to their advantage,

continually monitoring the latest offers to ensure

their money is always earning the maximum

interest possible. With a substantial deposit,

even small changes in the interest rate can

make a significant difference to earnings.

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66 million
US adults have no savings
MONEY MARKET
DEPOSITS
TAX-FREE
DEPOSITS
FIXED-RATE
BONDS
PEER-TO-PEER
LENDING
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US_166-167_Interest_from_Savings.indd 167 13/10/2016 16:20