Safest Investment Option for Women Who Are Just Starting Out in Finance
by Fintech News Singapore May 3, 2023Managing personal finances and making savings are crucial for achieving financial stability and security in life. It allows you to take control of your finances, plan for the future, and achieve your financial goals. Investing has become one of the most popular ways of generating passive income in the past few years.
While investing is straightforward for the most part, many female investors don’t know where to start. Active female investors can find an expert option withdrawal tutorial, and newbie investors can explore zero spread brokers here along with three ways they can start making passive income through investing.
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1. Open a High Yield Savings Account
When you open a bank account, there are various types of accounts you can open. One of these types is a savings account. You deposit funds into your account and watch your money grow over time. This happens because the bank guarantees certain returns on any funds deposited into your account.
A traditional savings account generally yields returns of up to 1%. So if you deposit $100 into your account, after a year you would have $110. A high yield savings account, however, offers a higher return rate of up to 4%.
Yes, savings accounts are not as profitable as investing in the stock market, but they are a very low risk option to gradually increase your money without doing much work. The best part is that even if the bank loses money, your funds are insured federally, so you will not lose them.
2. Invest In Index Funds
Index funds are another low risk way to passively increase your income. An index fund follows the progression of a specific market index.
When you purchase an index, your money is pooled with that of other investors. This money is then invested in stocks, funds, and other financial instruments that make up the index.
3. Invest in Annuities
An annuity is another type of financial instrument. It is backed by insurance companies that guarantee you will receive payments for the rest of your life, regardless of market conditions.
You can decide when you want your payments to start and whether they will be left to a beneficiary after your death. You need to pay a lump-sum amount to the insurance company; it’s called a premium. The insurer then turns your premium into monthly payments.
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Or let’s say you invest your money in bonds. Now the insurer will pay you your invested amount plus profit annually or semi-annually. These annuities can either be immediate, meaning they start immediately, or deferred, meaning payouts start later.
Conclusion
By investing in safe and reliable options, women can take the first step toward financial independence and security. But before you choose an investment option, take the time to understand your financial goals, risk tolerance, and investment horizon.
Featured image credit: Edited from Pexels
