When it comes to investment, it tends to be linked almost always to equities and rarely to fixed income. This is thought to be related to the stock market and financial products linked to this financial market. But this is not really the case since you can also make your savings profitable through fixed income operations. Not so aggressively, but at least guaranteeing returns that are generated on the invested capital
The fixed income that is available right now is represented by many savings models. They are of diverse nature and even with substantially different mechanics. With a series of characteristics that will be convenient for you to take into account from now on in case you opt for this investment model. It is not that it is worse or better than others, but that it will go depending on the profile you present as a small and medium investor that you are.
Of course you have to be very clear about fixed income you will not become millionaires From overnight. Of course not, but in return you will receive another series of benefits. That in any case, it will be able to compensate the economic efforts that you make to try to increase the balance of your checking account. To the point that it can be one of the alternatives that you have at the moment to achieve your goals.
Fixed income: term deposits
If there is a product that represents the essences of fixed income, that is none other than the term deposits. It is a very simple and easy to subscribe product that does not require a greater financial culture on your part. All profiles of savers can hire it. From very affordable amounts for all investors. Because in effect, you can formalize deposits for a single euro. Through the different models that these products present.
Its strategy is based on the fact that you deposit money in exchange for a return that you will normally receive at maturity. It is a profitability that is fully assured in all cases. In no case will you lose part of your savings. In addition, it is a very flexible savings model that you can subscribe to for the length of stay that you want. From a single month to five or six years as a maximum term. Period in which you will not be able to have the contributions, unless they are penalized by their commissions.
In any case, the interest offered by term deposits is currently very small. Usually does not exceed levels close to 1%. As a consequence of the cheaper price of money by the monetary authorities of the European Union. In this sense, you must know that it is worth nothing since it is at 0%. And of course this fact has been transferred to the performance of this product intended for savings. To overcome it, you will have no choice but to link it to other financial assets, generally from equities.
The impositions, on the other hand, shows a very conservative investment model. For people who want above all to preserve their savings. Beyond what you can win with these `` very defensive approaches. It does not entail expenses in its management or maintenance. Only the commissions for partial or total cancellation that they can present. Under commercial margins that can reach 2%. You can find them in different formats: in kind, promotional or for new clients, among others.
Bank promissory notes with similar approaches
This savings product differs very little from the previous model. Not surprisingly, its structure is practically the same, with very few differences. Bank promissory notes are contracted for modest amounts as well. From 1.000 euros onwards and with an interest rate that they apply that is below 1%. Nor does it incorporate commissions or other expenses in its management. But it contributes a small difference is that you receive the returns at the beginning, when you subscribe the product, and not at its maturity as occurs with term deposits.
However, contributions are not guaranteed if for any reason the issuing bank of this product goes bankrupt or has a frankly complicated financial situation. It is not guaranteed by the Deposit Guarantee Fund. It is a risk that you must necessarily assume if in the end you decide to hire any of these products. From this perspective, it is not a model that brings you many benefits at the moment. With a profitability that is at levels of historical lows. In return, it is very easy to understand and is intended for all kinds of customers
Investment funds, but fixed income
It is one of the savings products par excellence. And that has in its fixed income modality the reference point of your savings. In any case, its structure is more complicated than in the other models that we have previously exposed to you. Because in effect, they are developed with many investment strategies. As many as financial assets can exist. It is a way of more flexible investment that allows you to diversify savings in various financial assets. Even coming from various geographical areas.
From this point of view, investment funds based on fixed income are adapted to all the needs that they present. Like the other investment models you can subscribe them from quantities very affordable for everyone, from only 500 euros. But on the contrary, they carry several commissions that make the final product performance more expensive. Because there are management, deposit or even benefits. They range between 0,5% and 2%, depending on the proposals made by the managers.
This class of financial products does not guarantee any profitability. Unlike what happens with time deposits or bank promissory notes. Either way, the average interest they usually offer are around 5% per year. However, these percentages depend on many variables that can determine the final amount that will go to your checking account. In any case, it is a product that it is highly advisable that you use it for the medium or long term. In short periods they are not very effective.
Bonds: another alternative
Bonds are another option that you can take advantage of to make your savings profitable. They are marketed under different strategies: corporate, regional, national bonds or on any geographic area. No matter how far away they are, you can invest in the Chinese, Japanese or Mexican fixed income if this is your wish. Not in vain, you have many strategies to hire them, depending on what your profiles are and where you want to go in the investment approaches.
They offer you an interest rate close to 2% and in all cases they do not apply commissions or expenses in their management or maintenance. Despite them, the management companies can charge you a small amount for the procedures in their hiring. By having so much supply of bonos, you will have more than one problem to choose one of its models. Either way, it is one of the fixed products within fixed income investment. Where it should not be missing in your portfolio of securities or financial assets.
The bonds can be contracted individually or through investment funds based on fixed income. Even with the option of combining them with other financial assets, including those from equities. At this time, it is not a good option due to the low profitability offered by its returns. In line with the line of action of all financial products of these characteristics.
Tips for operating with these products
To make your goals of making your savings profitable be more effective, it will come in handy to import a series of lines of action. Among which are the following that we expose you below.
- It is an investment that is intended to guarantee you a fixed yield every year. Regardless of the performance of the financial markets, even in the most adverse scenarios.
- They are very easy to understand products and that do not require special knowledge for your part. Where any investor profile can subscribe them under their different variants that they present in their extensive offer.
- You have many alternatives to choose from. With periods of permanence for all tastes. From the shortest term to the most dense periods to improve the contracting conditions.
- They are especially intended in the worst moments for equities. Not surprisingly, they allow you to generate interest continuously. With which you can create a long-term savings bag to improve your positions.
- In no case will you lose money on open positions in these financial products. From this perspective, they will provide you a greater guarantee and security in the approaches you make in your investments. As an added value to all its benefits.
- They provide very affordable economic amounts for all the savings. From practically a single euro and up to the amount you decide yourself. With greater flexibility, even to carry out buybacks as a strategy to strengthen positions in fixed income.