How Investments work

Question?

If you want the potential for a better return than from a deposit account, do you need to take a risk?

Yes. But remember there is an element of risk in all investment activity. Those who take very little risk normally enjoy small rewards in all investment activity and that investments should not be considered for short term savings. Left in a bank or building society deposit account, your cash may grow in line with interest rates. However, over the long term, this approach is unlikely to produce the best return on your investment. Investing in a bank or building society offers the benefits of security and ease of access to your money that other investments may not. Before we get into the wide world of investments, let's go through the basics. Most investments can be neatly divided into what we call the four main "asset classes".