Within the world of finance and investment, there are different financial products that allow for the generation of income, the financing of projects or the covering of risks of different kinds. Euroteide Insurance We offer comprehensive advice on insurance, savings and investment products. That's why we know how important it is to know what a financial product is and what the main ones are.
What is a financial product?
A financial product is an instrument designed to meet specific economic needs of individuals or legal entities, whether to save, invest, finance or Protecting income from risksThese products are mainly offered by banks, financial institutions, insurance companies or stockbrokers, and Its purpose varies depending on the goals of the person or institution.: maximize returns, obtain liquidity or mitigate risks, diversify the portfolio, among others.
The main attraction of financial products is their ability to adapt to the profile of the person or institution that hires them: factors such as their risk tolerance, time horizon or economic needsFor example, a conservative investor will want Knowing the profitability of an investment fund pto know exactly What will be the return on your total investment?.
Financial products They are usually acquired through banks, brokerage firms, platforms online, private studies and insurance companiesA key feature of these instruments is the associated risk rating, known as rating, which acts as a guide for investors by indicating the level of security or exposure inherent in each product. This rating helps to make informed decisions, considering the balance between risks and possible benefits.
Main types of financial products
Financial products are divided into three broad categories: savings, investment and financing. Each is designed to meet specific economic needs, such as capital protection, income generation or access to liquidityHowever, each of them has its own subcategories that we develop below.
Savings financial products
The example financial products for this category are all those aimed at protecting capital with a very low level of risk. Although they offer modest returns, Its main advantage is the long-term stability. These instruments can be affected by inflation, which reduces purchasing power over time. Let's see what they are.
Bank accounts
Bank accounts, whether current or savings, are essential for money management. Current accounts allow you to deposit income, such as payrolls and pensions, as well as bills and debit or credit cards. But savings accounts are those that are specifically designed to store funds and offer interest, although generally without allowing expenses to be linked to the account.
Bank deposits
A deposit is an agreement with a financial institution in which the client immobilizes an amount of money for a fixed period in exchange for a return. Although the interest rates are higher than in savings accounts, Access to money is often restricted during that period. and include penalties for early withdrawals. It is an instrument Medium term, which is usually 30, 60 or 90 days.
83548431 – Glass jar with coins and blackboard on blue background. Finance and savings concept.
Pension schemes
The pension plans combine savings and long-term investment. They allow periodic contributions to be made throughout the life of a person or group of people who invest depending on the client's risk profile. These instruments offer attractive tax benefits and They are designed to provide supplemental income upon reaching retirement..
Financial investment products
Investment products are aimed at producing maximum profitability in the short and medium term. Unlike savings products, they do not guarantee results, which implies the possibility of lossesFor this reason, risk management is especially important when using financial investment products; examples of these are: mutual funds, bonds, index funds and stocks.
Investment funds
They are collective investment instruments that They group together contributions from multiple investors to execute previously defined medium and long-term strategies. These Investment funds are professionally managed, so include a payment of commissions, and they have a depository company that guarantees its security.
passes
The bonuses are Debt securities issued by governments or companies to finance themselvesIn return, investors receive a Fixed interest over the life of the bond, which is usually long-term, making them an attractive option for those seeking stability in their returns.
index funds
Similar to investment funds, but with a focus that replicates the behavior of stock market indices from different countries. They are passive management instruments, as long as The effort in fund management is reduced and therefore, the costs associated with its managementThey are ideal for those who wish to diversify their investments and maximize capital returns.
Actions
Shares represent a participation in the share capital of a companyIts appeal lies in the potential for dividends and profits from increased share value, although they are subject to market volatility and company performance.
16333710 – Mature couple with financial consultant
Financing financial products
These products allow users to access money or services without having the funds at that time, in exchange for a periodic interest payment. They are essential for acquiring high-cost goods or services.
Tarjetas de crédito
Credit cards offer a line of financing that allows you to make purchases or withdraw cash without having the money available at that moment. Its use is limited by a pre-established credit, and the amount used must be returned together with interest.
Bank
Loans are agreements through which A specific amount of money is given that must be repaid within an agreed period, adding the corresponding interest. They are commonly used to cover immediate needs, such as major purchases or personal projects.
Mortgages
Mortgages are Long-term loans for property acquisitionThey are characterized by being large in quantity and being backed by a mortgage guarantee, which grants the lender rights over the property in the event of default.
Financial products are instruments that allow you to leverage capital, plan for the future or finance different types of expenses. However, their use can be complex for people or institutions without experience in the field. Therefore, in Euroteide Insurance We offer comprehensive advice on insurance, savings and investment products to maximize capital returns.
