Investing Basics

Module 3

How You Can Invest

Making investments has become a lot easier in recent years. There are a host of different companies that individuals can use to invest with – the easiest to get started with is arguably with your own bank or with a reputable stock broker. In most case, you would just apply to open an account, get accepted and then have the ability to start investing. Usually, investment companies provide an online platform for their clients to use. There is typically an option called ‘deal’, which is the option that allows you to buy or sell investments.


When it comes to picking a company to invest with, doing your research is vital. After all, the company will be looking after your money, so it is important that you trust them. It is really important to make sure that the company that you invest with is regulated in your country. In the UK, investment companies must be regulated with the FCA and in the United States, they must be registered with the SEC. Investment companies will often list who they are regulated by at the bottom of the home page on their website.

Do investment companies offer all types of investment?

Before opening an account with an investment company, it’s important for investors to know what types of investments they offer. Not all investment companies offer all types of investments. Some brokers only offer stocks and not bonds, while others will offer all investment types. 


If you only want to invest in stocks, then it wouldn’t necessarily be an issue, but if you want to have access to more options, you may prefer to invest with another company. In addition, it may also be the case that certain investments are only available with certain providers. This is often true with investments that are offered by the government. For example, American Treasury Bills can only be purchased through ‘TreasuryDirect’, which is a government platform.


So, before opening an account with an investment company, make sure that they offer the investment types that you would like to invest in.

Finding the right account for you

The standard type of account would be a ‘dealing account’. This allows you to buy and sell investments as usual, without any additional benefits – any profits made on investments will be subject to local tax policies.


However, individuals can often open tax-efficient accounts that are designed to encourage people to save money. Such accounts allow individuals to invest up to a certain amount of money, without paying any tax at all. For example, in the UK, the Individual Savings Account (ISA Investments) allows British citizens to invest up to £20,000 a year, without paying any tax on the profits.


There are also other types of investment accounts that help people to meet certain goals. For instance, there are accounts that help people to save money to buy their own home, invest for their children or invest for their retirement.


Before deciding which investment account is suitable for you, check out the options that are available in your country and pick the account that best suits your investment goals.

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