7 Types of Investments You Should Know About

In general, American people need investment to pay their retirement although most of them are qualified to receive some social security benefits. The basic seven types of investments should be understood by people even in their in their 20s. TheDigitalWay/Pixabay

Investing is an important part of preparing for the future. If you want to retire someday, investments and other retirement savings are vital for success. But if you don’t know where to start, the entire world of investments can feel intimidating. Here is a list of seven types of investments you should know about and how they may fit into your long-term financial plan.

Treasury Bills

Every investment has some level of risk, but the lowest risk investment is one with the United States government. Treasury Bills are the closest thing to “risk-free” investing you’ll find. But where there is little risk, you’ll also find little return.

Treasury Bills are ultra-low-risk investments that many investors buy through a mutual fund or ETF. Often called “T Bills” by experienced investors, annual yields is around two percent as of this writing in May 2022.

Certificates of Deposit

The next level up on the risk-reward scale is a bank Certificate of Deposit, or CD. CDs are a time-bound deposit account available at most banks and credit unions. Like checking and savings accounts, CDs are insured by the FDIC up to $250,000 per depositor, so there is almost no risk with this investment, though calling it an “investment” rather than a “savings” product is easily debatable.