An investment account is maintained with financial institutions such as banks, brokerage houses, or even insurance companies. The primary purpose of this account is preservation and capital growth, as well as earning fixed income gains through long-term deposits in the asset portfolio.

In general, "investing" means a proactive use of assets in a very broad sense - such as patents, trademarks, rare wines or gold coins, but also small businesses, real estate and antiques. In this regard, the investment account contains fewer physical assets: cash, stocks, bonds, and mutual funds. Meanwhile, the basic goal of investing remains the same: to buy the asset and hold it for the long term, and to sell it at some point in the future when the investment value is cheaper. Depending on the asset you want to invest in, you need to look at your investment as a long-term process as you have to wait for the value of the particular object to increase.

Investment Account Features
Before opening an investment account, you should consider whether or not this type of financial service is best for your risk/reward balance. Furthermore, liquidity preferences embody your goal. Investment accounts are usually maintained with long-term goals. Long-term maturity is traditionally considered to be 7 years or more, but this number should not be the determining factor in deciding whether or not to open an investment account. This banking service is often used when there is a specific event in your life that requires a higher income, e.g. For example, if you need to send your child to college, buy a house, or retire.

Since one of the most important determinants of an investment account is its longevity, you should be prepared for another attribute of the investment account - liquidity. Any financial instrument is less liquid compared to cash in your checking or savings account. Additionally, this type of deposit usually incurs higher transaction costs if you want to access the funds earlier than a certain time specified in the agreement between you and the financial institution.

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.

Brokerage account
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.

Retirement account
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.

Specialty account
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
Business account works similarly as brokerage account, while the client is a business instead of a private person.

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