Savings is very important and most of the time, there is a high probability that you will save it into the bank and as a result you can take advantage of the different packages which the banking system has to offer you. The best part of it is that you can take advantage of compound interest, with no risk.
Financial institutions offer a variety of savings accounts, each of which pays a different interest rate and as a result, you can access your money at any time and Earn interest and move money from one account into another account irrespective of the financial institution.
In addition, some savings account have variety of services like:
- Interest on savings generally.
- Interest on treasury Bill
- Interest on Fixed Deposit etc
You can also earn interest during the term (one month, three months, six months, etc.), However, Must leave the deposit in the account for the entire term. Failure to keep your money within the agreed will to avoid charges penalties and even affect your interest.
In Investing, the dynamics is completely different because it takes a long-term view, putting money into investments regularly and keeping it invested for two, five, 10, 15, 20 or more years.
In Stocks — Owning Part of a Company. Shares of stock may be acquired on an organized exchange such as the NGX, Nasdaq or New York Stock Exchange, through a stock-broker. As a result, you become a part owner of the company and are known as a stockholder, or shareholder.
Like Savings above, a Stockholders can make money in two ways:
A. Receiving dividend payments: A dividend is an income distribution by a corporation to its shareholders and
B. Selling stock that has appreciated: Stock appreciation is an increase in the value of stock in the company, generally based on its ability to make money and pay a dividend.
However, if the company doesn’t perform as expected, the stock’s value may go down. There is no guarantee you will make money as a stockholder. In purchasing shares of stock, you take a risk on the company making a profit and paying a dividend or seeing the value of its stock go up.
Before investing in a company, learn about its past financial performance, management, products and how the stock has been valued in the past. Learn what the experts say about the company and the relationship of its financial performance and stock price. Successful investors are well informed.
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Ambrose Omordion
