Fixed income investment

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Posted by on Thursday July 12, 2012 9:45:12:

A Fixed income investment is the most reliable way of earning money from your investment. Why I say reliable is because there are no stories involved, no wahala or asiri, as you just get what was promised to you.

There are quite a number of investment opportunities for people who want to get a fixed income periodically such as:

1. Bonds: See http://www.dmo.gov.ng
2. Fixed Deposit accounts: Visit any bank
3. Fixed income Funds

Bonds
Also referred to as treasury bonds are simple debt instruments owed by the Federal government of Nigeria to investors who buy them. It is insured by the government from time to time through the banks and interest is normally paid at a specific time and at specified interest rate. Most fixed FGN bonds pay interest to investors twice a year. You can get more information from the website http://www.dmo.gov.ng/debtprofile/fgnbondmarket.php

Fixed deposit accounts
This is an account by a bank that pays you a fixed income for your investment. The more money you invest, the better deals you'll get. The last time I invested in a fixed income account, the interest was at 10% however it seems interest on such accounts have started falling. If you have over N1m, you can get more benefits with such an account and the time frame is from 7 days, 3 months, 6 months and 1 year

Fixed income Funds
These are funds setup by fund managers such as securities or notable investment companies that promise to pay a good rate for your investment. Banks and their capital investment companies can at time offer this and you can get the details from newspapers and financial publications. Rates for this sort of investment could be based on estimated values.


The good thing about this sort of business is that unlike just being a shareholder, your capital is guaranteed and so is your income. It's like being a creditor in a bank, when such as bank of company faces liquidation, the first set of people to be paid are the creditors before the shareholders who bear the greatest losses.

Scenario
Assuming there is a public offer of a fixed income investment that offers to pay 10% p.a for your investment of you invest up to N1m, then it means that your capital will earn you N100,000 at the end of that period, no stories. It is a fixed and certain income unlike buying shares.



Comments:
Re: Fixed income investment Reply by Valentine umeh on Friday July 13, 2012 at 15:50:14:

Please i need you to shed more light on these ideas. Can i just walk into any bank and make such investments?






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