One of the investment options that interest me is saving accounts since it is a good investment for risk-averse investors who need money in the short term and want to avoid the risk of not getting their money back. I am also interested in investing in saving accounts due to their potential to earn interest, the ease to open, and FDI insurance and security. The savings accounts have a minimum balance requirement, low interest rates than other investments, and federal limits on saving and withdrawal ( Royal , 2021). Therefore, savings accounts as bank products are considered low-risk investments. However, there are risks involved in investing in a savings account, especially the high-yield accounts since they can lose the purchasing power over time due to inflation when rates are low. There are essential factors I would consider when investing in saving accounts, such as interest rate, minimum cash balance, service charge, doorstep banking facilities, and debit card deals.
Another investment choice that interests me is a cryptocurrency due to its high profitability. Also, it is a good investment since it helps one gain direct exposure to the demand for digital currency. According to Forbes, cryptocurrency is a high-risk investment. The risks arise since cryptocurrency is a young currency in the market ( Khojikian,2021). Another risk is the changing price of the cryptocurrency, which occurs even within minutes, making trading dangerous. Unforeseen fluctuations in the market can also result in sharp and abrupt moves in the price. Generally, the risk of investing in cryptocurrency is related to volatility (Khojikian,2021). When planning to invest in cryptocurrency, one should be aware of the currencies one wants. While at it,it is advisable to diversify the investment in various cryptocurrencies. Other factors to consider are risk tolerance , the performance of the selected currency and the developer activity since more substantial projects have high developer activity.
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References
Khojikian, G. (2021). Council Post: The Biggest Risks Of Investing In Bitcoin. Forbes. Retrieved July 14, 2021, from https://www.forbes.com/sites/forbesbusinesscouncil/2021/06/17/the-biggest-risks-of-investing-in-bitcoin/
Royal, J. (2021). Saving Vs. Investing: Here Are The Key Differences For Managing Your Money. Bankrate. https://www.bankrate.com/investing/saving-vs-investing/
