Most of us have an instant inkling that when it comes to growing money, we have a savings account in mind. While this is not too bad an idea, its earning potential is nothing compared to what you can earn from investments. Savings in a bank account can only earn you 0.10% to 0.25% in annual percentage yield, and it can only go higher depending on the type of savings account. This is based on data stipulated in the websites of three of the country's biggest and most reputable banks, namely, BDO, BPI and Security Bank.
So, what are the investment ideas that are sure to be better than your average savings account? Here are some brilliant suggestions that you may want to venture into come this New Year. Investment should be your New Year’s resolution.
One of the most talked about investment options today is called Variable Universal Life insurance, better known as the VUL. This is a type of policy that is consisting of both insurance and investment. The components of the insurance comprises of the savings garnered via premium payments and a death benefit. Minus the payments for the insurance coverage and administrative expenses, the rest of the funds go into investments.
The connotation of the term "variable" is due to the fact that the remaining funds that are invested go into either stocks or bonds, whose individual values vary. Also the term "universal" is utilized, because the premiums are flexible in nature. This means that the payment of the premium is not necessarily periodic.
First of all, the benefits of a VUL, although there may be risk factors to consider, are that there's a much higher potential for bigger and better return on investment. Second, VUL allows funds to be withdrawn without interest and not treated as a loan. This is in cases of a financial emergency on the part of the insured. This is with recommendation that the funds that were withdrawn will be replaced in order to keep his/her investment on track with the goal. Moreover, the best thing about it, the withdrawal does not affect the face value of their money.
Next in line, we have what is called UITF in the money world. It stands for Unit Investment Trust Funds. These are pre-determined funds that are gathered from a group of investors who have a common investment goal. These funds are thus invested in several financial components like bonds and equities, for example, and are duly managed by experts and fund professionals.
For a more in depth understanding of what UITF is, click HERE.
We also have the widely known MUTUAL FUND. But what do we really know about it? Mutual Fund is the type of investment fund where a group of professional investors, put together a sum of money to the purchase of securities, be it either by an institutional or retail investor.
By securities we mean assets in the form of bonds, the stock market and/or money markets. Mutual Fund by itself can be considered a company and an investment at the same time. This idea is true because engaging in mutual funds, basically allows an investor to buy part of the ownership of the mutual fund company.
These are just three basic examples of profitable investments, but these are the three major ways that can really help grow your money, as far as individual investments are concerned. So, think about it, before spending your money out of impulse.
You still have the entire December 2018 to think about making a life-changing move or to stick around your usual way about things. How your 2019 will look like is definitely up to you!
Sources: https://www.bdo.com.ph/personal/accounts/peso-savings-account/passbook-savings https://www.bpiexpressonline.com/p/1/326/deposit-rates-savings-and-checking https://www.securitybank.com/personal/accounts/savings-checking/allaccess/ https://www.investopedia.com/terms/v/variableuniversallife.asp https://www.sunlife.com.ph/PH/Insurance/Bright+Ideas/3+Benefits+of+a+VUL+Insurance+Plan?vgnLocale=en_CA https://www.bdo.com.ph/personal/trust-and-investments/unit-investment-trust-funds https://www.investopedia.com/terms/m/mutualfund.asp