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DonaldWalker Offline

Beiträge: 5

10.01.2023 18:57
Investment account Antworten

An investment account is maintained with such financial institutions as banks, brokerage houses, or even insurance companies. The main purpose of this account is capital preservation and growth, as well as fixed-interest profit through long-term deposits in the asset portfolio.

In general, "investing" means a proactive use of assets in a very broad definition - such as patents, trademarks, rare wines or gold coins, but also small businesses, real estate and antiques. In this regard, the investment account contains fewer physical assets: cash, stocks, bonds, and mutual funds. The basic investment objective remains the same – to buy the asset and hold it for the long term, and to sell it at some point in the future when the asset's value is cheaper. Depending on the asset you have decided to invest in, you need to evaluate your investment as a long-term process as you will have to wait for the particular asset to appreciate in value.

Investment Account Features
Before opening an investment account, you should consider whether or not this type of financial service is best for your risk/return. Furthermore, liquidity preferences embody your goal. Investment accounts are usually maintained with long-term goals. Traditionally, the long term is considered to be 7 years or more, but this number should not be the primary determinant when deciding whether or not to open an investment account. This banking service is often used when there is a specific event in your life that requires a higher income, such as a wedding. For example, if you are sending your child to college, buying a house, or approaching retirement.

Since one of the main determinants of the investment account is its long-term nature, you should be ready to face another attribute of it - liquidity. Any financial instrument has less liquidity compared to cash in your checking or savings account. Additionally, this type of deposit usually comes with higher transaction costs in case you want to access the cash sooner than a specific time specified in the agreement between you and the financial institution.

Architectural design and tools
Types of Investment Accounts
Once you have decided to open an investment account, the next step is to find a bank or other financial institution that can offer you the most suitable type of investment account in terms of cost, risk level and other components. There are different types of accounts designed for different needs and desires of investors, but not all banks offer such services.

Brokerage account
This account is managed by the investor himself. Usually, after depositing cash into this account, you can use the funds to buy various financial instruments or other types of investments. This account includes a commission paid to your broker for executing your buy and sell orders. If you are unsure about your investment skills, you can use a full service brokerage account that includes investment advice.

Retirement account
This account is designed for long-term continuous deposits over the years of employment, leading to higher retirement incomes on top of the state pension (if applicable in your country - ask us). In some countries, payments into the retirement account are tax-free.

Custody Account / Guardianship Account
These accounts are designed for investors who want to save money for their children or someone else. This includes savings for a child's education.

Special account
This type of account typically includes testamentary or testamentary trust accounts. In the case of a testamentary trust account, financial instruments are registered in the name of the trust while being administered by a trustee. A testamentary trust is now opened by the testimony of a deceased person.

Business account
The business account works similar to the brokerage account, where the customer is a company and not an individual.

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