The government only represents approximately 30 percent of our retirement income allotment. The companies that we work for and their retirement pension plan is only going to amount to another 30 percent or so, and most people do not even have these types of retirement plans. In other words, it is absolutely up to us to figure out how to invest wisely both on a short term and long term basis in order to make up for the shortfall in order to live comfortably following retirement without having to give up some basic freedoms during retirement age. Here are some of the fixed term investment types that are available to most consumers, with most lasting between 1 and 5 years in length.

1 - Term Deposit -

- The rate of return on term deposits tends to be higher than with most saving accounts. Some institutions may even allow for the funds to be withdrawn before the point of maturity if you are willing to sacrifice some of the accrued interest.

- The interest rate is guaranteed, and tends to be significantly higher than what is offered by savings accounts.

- Term deposits usually have a term of a year or less.

- Minimum deposits are most likely required.

- Term deposits are guaranteed by the Deposit Insurance Corporation (DIC) for certain amounts, but this is different from one country to the next.

2 - Guaranteed Investment Certificate -

- Guaranteed Investment Certificates have terms that range from 1 to 5 years.

- The Interest rate for GICs is guaranteed.

- The money in these certificates is usually locked in until the point of maturity.

- Some financial institutions may offer a higher rate if a minimum deposit amount is made.

3 - Treasury Bill -

- This is a short term promissory note that is issued by the federal government and called a T-bill or treasury bill.

- The usual denominations used for T-bills is $1,000, $5,000, $25,000, $100,000 and $1,000,000, and terms last as long as 365 days.

- Treasury bills are always sold at discounted rates.

- Investors can sell these treasury bills before maturity at a price that will be determined by the current interest rates.

- Investors can also buy older issues of these bills from investment dealers, who now make treasury bills available to small investors at $1,000 with $1,000 increments.

4 - Mortgage Backed Security -

- These mortgage backed securities are large pools of residential mortgages that institutions sell when offering mortgage options for home buyers.

- Each pool of mortgage has a unique maturity date an interest rate.

- There are two different types of mortgage backed securities, those which are pre-payable and those which are non pre-payable. Those which are pre-payable mean the mortgages permit home buyers to pre pay in order to pay their mortgages off more quickly.

- Every month, an investor for mortgage backed securities receives an income proportion of the principal as well as the interest for the mortgage.

Photo Credits: 1

Originally posted 2009-03-16 05:36:42. Republished by Blog Post Promoter

Related Posts

• What You May Not Know About Personal Finance Unless you’ve taken some courses on handling finances, there is a chance that you may not be aware of a few of the key points about budgeting, managing your money and planning for the future. While a lot rests on common sense, there are a few techniques that everyone can......
• Organize Your Personal Finances in No Time by Debbie Stanley If nothing else, the state of the economy has shown that millions of people don’t have a good grasp of how to manage their personal finances. There are hundreds of books written every year on the subject and yet, this concept still seems to elude many. Some books are either......
• Top Personal Finance Blogs for August 2009 These are the top personal finance blogs according to this blog's quality traffic score. How does it work? Glad you asked... I took the top 15 personal finance blogs in terms of visitors referred to this site. Then I created a quality score which I define loosely as engaged traffic.......
• Lessons in Personal Finance The past few years have been especially tumultuous for many people as far as personal finance is concerned. There are a number of lessons that can be gleaned from this, and if you can take these lessons away from the past few years of losses, you may be able to......
• How to Protect Your Pension in the Credit Crunch As news of bank failures continues, and government officials are debating a $700 billion bailout plan, many consumers are starting to worry about the state of their pension plan. If you have it invested in the wrong stocks, you could end up losing it all, or at the very least,......

Related Websites

• Brisbane Marina, Brisbane, CA Phone: (650) 583-6975 Boat Launch? Yes, the marina offers this facility. Average Depth: 10 feet. Please be advised that this may change due to the season or to adverse weather conditions. It is always best to call ahead to check on current water levels before you arrive. Marine Standby......
• Skateboarding Lexicon 180 - This is a term that refers to a half rotation. 360 - This is a term that refers to a single full rotation. 540 - This is a term that describes a 540-degree rotation while in the air. This is equal to one and a half full rotations.......
• Carnival of Weight Loss -- Barack Obama Edition #3 Welcome to the November 8, 2008 edition of carnival of weight loss and a new American President: Barack Obama. fitnchic presents 4 Effective Ways to Avoid Weight Gain During The Holidays :: FitNChic.com - Get in Shape Fashionably :: posted at FitNChic.com - Get in Shape, Fashionably!. Big Cajun......
• The Value of Paper Money Those who are into coin collecting often fail to think about the value of paper money. While they think about coins and how to add them to their collection, they fail to see the benefits of the other side of currency. Many who have stuck with coin collecting for years......
• How to Be Successful at Collecting Old Paper Money There are plenty of currency collectors who focus in on coin collecting and fail to think about collecting old paper money. This is incredibly unfortunate, as paper money can be one of the more interesting collections to have. Paper currency helps to bring about interest and variety to a collection.......

Online Stores

• 1993-2001 Bill Clinton President US Political Historical Memorabilia Collectibles
• Photos, Prints Buffalo Bills Football-NFL Fan Apparel & Souvenirs Sports Collectibles
• Ads, Flyers Graham, Bill G Rock, Pop Music Memorabilia Entertainment Memorabilia
• Bill Elliott Racing-NASCAR Fan Apparel & Souvenirs Sports Collectibles
• Banners & Flags Buffalo Bills Football-NFL Fan Apparel & Souvenirs Sports Collectibles

If you liked this article, vote for it on del.icio.us and stumbleupon.


Categories:

Banking, Investing, Mortgage, Personal Finance

Tags:

accrued interest, allotment, deposit insurance corporation, financial institutions, gics, investment certificate, investment certificates, investment types, promissory note, rate of return, retirement age, retirement income, retirement pension plan, retirement plans, saving accounts, t bills, term basis, term deposits, treasury bill, treasury bills