Opening Interest-Bearing Investment Accounts

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An interest-bearing investment account is a fixed instrument, such as a certificate of deposit, a treasury or a bond. Discover how to keep track of interest rates after opening an interest bearing account with help from a registered financial consultant in this free video on investing and money management.

Part of the Video Series: Investment Basics
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Video Transcript

This is financial adviser, Patrick Munro, talking about Opening Interest-Bearing Investment Accounts. An interest-bearing invest accounts is one of a fixed nature. In other words, it's a fixed instrument. It could be a certificate of deposit, could be a treasury, could be a bond. But it's all based on interest, and the bearing interest that's there. If you're managing that type of an account, you have to always live interest rates. Are they up? Are they down? Is the Fed cutting rates, as they have been over the last couple of years to try to stimulate the economy. These accounts are very conservative in nature. There's no possibility of losing money, but there's a constant battle to drag more yield out of the account, make it work harder, as the enemy of an investment interest-bearing account is inflation. If the cost of things go up and you're not earning enough money to keep up with inflation, then you, too, are losing money, but in real time. That's important. So managing an interest-bearing account is being aware of the interest rates that are prevailing around you, and maximizing those rates to your benefit. This is financial adviser, Patrick Munro.

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