In the investment industry, seasoned investors know that the higher an investor’s risk, the higher the potential return on investment. Therefore having a savings account is not necessarily the best way to accrue a lot of interest on your savings. These are four ways in which to maximize the returns on your savings.
Treasury bills are the short-term equivalent of Treasury bonds: They are a way to lend your money to the government and receive interest payments in return. Typically you'll buy a Treasury bill at a discount and receive the bill's face value when the term runs out. For example, you might buy a GHC100 treasury bill for GHC98, then receive GHC100 when the term expires; the extra GHC2 is your interest on the loan you made to the government. Even though treasury bills have a low return rate, they are the most stable due to the fact that they are dependent on government funds.
Money market funds
A money market fund is an open-ended mutual fund that invests in short-term debt securities such as treasury bills. Money-market funds are widely regarded as being just as safe as bank deposits yet providing a higher yield. They are short term liquid investments with high credit quality and are considered to be safe due to the fact that they invest in government securities. They are considered to be higher than bank accounts on the strength of the fact that they pay out a higher yield than a savings account.
Real Estate Investment
Investing in real estate is one of the safest types of investments. Property/ Land is in constant demand and the value rarely depreciates. It can also be leased or rented out to make significant returns. At Devtraco Plus, rent on all our properties averages from $1,500 - $6000 and investors are sure to gain a rental yield of 12% with a 5% capital appreciation over a period of 12 months. Investing in property acts as financial security for the future and also provides an extra source of income.
If you are looking for a long term plan to make sure that your money yields a high return, you should look into investment funds. They give a high interest rate which your investment grows over a long period of time. The thing with these investment funds is, you must be ready to make a long term commitment as you are usually not allowed to withdraw your money till after a number of years.
These four methods are sure ways in which to get the most out of your savings as opposed to a traditional savings account in a bank.