A Peek into Different Types of Investment Securities

Investment Securities is a frequently asked question. Before planning to invest your hard earned money in any type of investment plan, one thing that passes your mind is how secure will your money be with any finance organization.

What is investment Securities:

Investment securities refer to documents or statements that indicate that you have lent or invested your money with a company or a government entity. Investment securities are basically of two types – Equity Securities & Debt Securities. And, the entity or corporation that issues investment securities is known as the issuer. There are many different securities where you can invest your money. Here’s a quick refresher on some of the most popular security investments.

Stocks:

Stocks are the best known equity security. By buying stock you choose to purchase an ownership interest in a company. However, stock prices can fluctuate greatly. They have a higher investment risks than most other securities. Also, stocks hold the potential of bringing you the greatest results.

Inter-Corporate Deposits:

Inter-Corporate deposit is a debt instrument issued by a company. In other words, you are extending loan to the company by choosing to invest with it. You are entitled to receive interest every month from the company until you withdraw your money or the loan is paid off. ICDs are comparatively safer and more stable than stocks. You are guaranteed a steady income from them.

Mutual Funds:

A mutual fund is made of a variety of securities. It is known to focus on stocks, bonds or a collection of the both. Here, the money invested by you will be pooled with other investors. An investment company chooses the securities and manages the mutual fund. This diversity helps decrease the investment risk.

Thus, the world of finance can be quite puzzling and intimidating at times. But, the concept of investment is inherently simple once you become familiar with the different types of investment plans, their benefits and the risk involved. In this blog we have tried to educate the current as well as the potential investors on the practice of investing without keeping even an ounce of fear in their heads about losing their money to a lucrative investment plan offering organization.