When you compare investment products, you should consider two key factors:
Risks involved – most investments do not give you a capital guarantee. How much of your original capital could be at risk? Is there a risk of poor returns? Is there inflation risk?
The likely return – risk and return go hand in hand, so as a general rule the lower the risk the lower the rate of return you should expect. With longer-term and higher-risk products, you can expect higher returns, but this is not guaranteed and you could lose some or all of your money. You need to consider carefully the effect of this on your financial situation. You also need to consider how long your money will be tied up for.
When you compare investment products, look at:
You can get information about investment products directly from many banks, life assurance companies and investment firms. Financial advisers, including brokers and tied agents, also advise on and sell these products on behalf of the main providers.
These products are more complicated than Savings and Deposit accounts, so consider getting professional financial advice. Make sure any adviser you use is authorized to give investment advice and get the most from any financial advice by asking the right questions.
Before you choose an investment product, ask:
Mixing Savings & Investments
Most people have a mix of short, medium and long-term goals when it comes to saving. If you can save and invest it makes sense to spread your money and put some in savings accounts to meet short-term needs and some in longer-term investments, where it can potentially earn more.