An investment account is held at such financial facilities as banks, brokerage houses or even insurance companies. The main purpose of this account is preservation and capital growth as well as fixed income gains through long term deposits in the asset portfolio.
Generally, 'investing' signifies a proactive use of assets in a very broad definition – such as patents, trademarks, rare wines or gold coins, as well as small businesses, real estate and antiques. In this respect investment account holds less physical assets: cash, stocks, bonds and mutual funds. Meanwhile, the fundamental aim of the investment remains unchanged - to buy the asset and keep it long term and sell it at some point in the future, when the investment value is more favourable. Depending on the asset that you have decided to invest in, you must evaluate your investment as a long term process as it is required to wait while the certain object grows in its value.
Functions of investment account
Before opening an investment account, you should evaluate whether this kind of financial service is the most suitable for your risk/return or not. Moreover, liquidity preferences embody your goal. Investment accounts are usually operated with long term objectives. Traditionally, long term is considered to be 7 years or more, but this number should not be the main determinant while choosing whether or not to open an investment account. This bank service is frequently used when a certain event is going to take place in your life, which will require bigger amount of income, such as sending your child to college, buying a house or facing a retirement.
As one of the main determinants of investment account is its long term nature, you should be ready to face another attribute of it – liquidity. Any financial instrument has less liquidity in comparison to cash in your checking or savings account. In addition, this type of deposit is typically charged with higher transaction costs, in case you want to access the cash earlier than at certain point of time defined by the agreement between you and the financial facility.
Types of investment accounts
If you have decided to open an investment account, the next step is to find a bank or other financial institution that can offer you the most suitable type of investment account regarding the costs, risk level and other components. There are various kinds of accounts designed for different needs and wishes of investor, but not all banks offer such services.
This account is managed by the investor himself. Usually, after depositing cash on this account, you can use the funds to purchase different financial instruments or other types of investments. This account involves a commission paid to your broker for executing your purchase and sell orders. If you feel uncertainty regarding your investing skills, you may use full service brokerage account, which would also include investment advices.
This account is designed for long term continuous deposits over the years of employment, which results in higher income during retirement in addition to the state pension (if applicable in your country – ask us). In several countries, deposits in the retirement account are not tax applicable.
Custodial / guardian account
These accounts are designed for investors, who want to save funds for their children or other person. This includes savings made for a child’s education.
This type of account usually includes testamentary or non-testamentary trust accounts. In case of a non-testamentary trust account financial instruments are registered on behalf of the trust, while managed by a trustee. Meanwhile, a testamentary trust is opened through the testimony of a deceased person.
Business account works similarly as brokerage account, while the client is a business instead of a private person.
Account opening services
Confidus Solutions team of highly-skilled banking agents and financial experts will provide you detailed consultation regarding different types of bank accounts in order to offer you the most efficient solution. Our agents are dealing with a number of global banks and financial institution, thus providing a great variety of solutions. Contact us and we shall review your case, provide the list of documents required to open an investment bank account and guide you through the whole procedure, including, negotiations with the bank.
Advantages & disadvantages of investment account
As discussed previously, it is very significant to determine the main reasons of opening an investment account or other type of account. If comparing to savings account, one must take into consideration that the funds deposited will not be accessed easily and the process will be more time consuming.
While your investment account has the potential of high return, if invested correctly, a risk of losing some or even all the money, if invested incorrectly, should be taken into consideration.
Favoured jurisdictions for investment banking
We can assist with bank account solutions in numerous jurisdictions, however, some may offer more benefits in terms of confidentiality, asset protection, and financial sector legislation. Following jurisdictions are recommended for banking and payment solutions.
|Deutsche bank||Bladex bank||UBS|
|Unicredit bank||General bank||Credit Suisse|
Our professional team of lawyers and bank agents will help you to choose the bank and type of your account. We have many years of experience in servicing private and corporate clients. If you have any questions regarding bank accounts – please check F.A.Q. section or contact us now!