Glossary
Fixed interest investments
Long-term interest-earning investments, such as bank term deposits and government stock. These investments are generally low-risk, and offer a reliable return rather than growth of capital.
Money paid in return for the use of money. If the bank is using your money (in a savings account) they pay you interest. If you are using the bank's money (via a loan), you pay the bank money.
An IOU from the Government. The public and companies can lend the Government money. In return they get a fixed rate of interest for a certain period of time and then the money is repaid. The document which acknowledges the amount the Government owes each person or company is called Government Stock.
An investment is normally considered to be risky if there is a reasonable chance that its value will vary significantly in the future. For example, an investment in shares is more risky than an investment in a bank term deposit. The value of shares may fall below the price paid for them while the value of bank deposits generally do not. High risk investments should only be taken on with long term intentions. You would expect a high long-term return to compensate for high risk.
Browse the glossary
Here you'll find explanations of the many financial terms used throughout the Sorted website.
