A Beginner’s Guide to Investing: 7 Products You Should Know

Starting your investment journey is one of the most empowering steps you can take toward securing your financial future. Once you’ve built a stable financial foundation with essentials like an emergency fund and manageable debt, investing is the next step to grow your wealth and protect it against inflation.

It’s a long-term approach that can help you achieve goals, whether that’s buying a home, preparing for retirement, or simply attaining financial independence.

The wide variety of financial products available today makes it a must for any novice investor to understand the difference between investment types. The more you know about how asset classes like stocks, bonds, and real estate differ, the more power you have to diversify your portfolio.

Even as a beginner, it’s important to have a varied mix of investments to help you manage risk and encourage more consistent growth over time. The knowledge you gain from reading up before you get started will equip you to make decisions that align with your personal goals, risk tolerance, and financial timeline.

With that in mind, let’s learn more about some key investment products that every new investor should be familiar with.

Time Deposits

Time deposits provide a simple solution for beginning investors in search of reliable ways to earn a fixed return. These bank accounts allow you to lock in your money for a set period—often six months, a year, or even longer—at a higher interest rate compared to a regular savings account. Maya Bank, Inc.’s Maya Time Deposit Plus, for example, allows you to earn interest at rates of up to 5.75% per annum depending on your chosen term. If you’re looking for a time deposit Philippines’ investors depend upon for good returns, there’s really no better choice. 

In general, time deposits are an attractive low-risk, low-maintenance investment provided you don’t need immediate access to your funds. Do bear in mind that early withdrawal typically incurs a penalty, so you’ll need to make sure that you can avoid moving your money until the term ends.

High-Yield Savings Accounts

Do you want financial flexibility but also a higher return than a standard savings account? Then you’re best off opening a high-yield savings account to store your money. Unlike time deposits, these accounts allow easy access to your funds, without the early withdrawal penalties. While the interest rate may not be as high as that of a time deposit, you can still grow your savings at a faster rate with a high-yield account than a traditional savings account.

If you want a fuss-free high-yield savings account, you can check out Maya Savings. It offers a base interest of 3.5% p.a which can be boosted to up to 15% p.a as long as you consistently use your Maya e-wallet for transactions.

Stocks

Once you feel ready to embrace a bit more risk, you may want to look into stocks and take advantage of their potential for significant growth over time. Stocks are investments in individual companies, so they let you benefit from a company’s success as its value rises. Some stocks also provide dividends, in which investors share a certain amount of the company’s profits and which can serve as an additional income stream.

However, the stock market is inherently volatile, and prices can fluctuate due to various factors, from economic shifts to changes within the company itself. Thus, stocks are generally a better choice if you have a longer investing timeline, since you can ride out short-term dips in favor of potential long-term gains.

Bonds

When stability is the priority, bonds can provide a dependable stream of income without the fluctuations of the stock market. In essence, bonds are loans that you give to an entity—typically a government or corporation—in exchange for regular interest payments. They come with varying terms, which may range from a few years to several decades.

They also generally carry less risk than stocks, especially government bonds because the government has the ability to collect taxes to pay their debt to their lenders (i.e., the investors). As a beginning investor, adding bonds to your portfolio can be a solid way to keep it stable while generating steady returns, particularly when interest rates are favorable.

Mutual Funds

If the idea of managing individual stocks or bonds feels overwhelming, mutual funds can give you a more accessible entry point. Mutual funds pool money from multiple investors to create a diversified portfolio that’s managed by professionals.

This means you can gain exposure to a mix of assets—such as stocks, bonds, or a combination of both—without having to choose each investment yourself. Mutual funds are great for beginners because they allow you to benefit from diversification and expert oversight, and they’re especially ideal if you prefer a more hands-off approach to investing.

Unit Investment Trust Funds

Unit investment trust funds, or UITFs, are similar to mutual funds in that they pool money from various investors to create a diversified portfolio. However, UITFs are typically offered by banks and other financial institutions.

They are particularly popular in the Philippines, especially because they often offer lower minimum investments and fewer fees than mutual funds. As such, UITFs are a lot friendlier to novice investors in search of accessible options.

Real Estate Investment Trusts

Finally, real estate investment trusts (REITs) are a practical investment for anyone interested in the real estate sector who might not have large amounts of capital or want the responsibility of property management.

These trusts invest in income-generating properties like office buildings, shopping malls, and apartment complexes. In this way, REITs allow investors to earn dividends based on the performance of the properties. They’re particularly helpful for striking a balance between steady income and a more diverse portfolio—ideal if you’re aiming for a balanced approach to investing. 

Summary

It might feel daunting to think about how to start your investment journey, but building a diverse portfolio as early on as possible is one of the best ways to manage risk and grow wealth over time.

Don’t hesitate to explore a range of products suited to your goals and comfort level, as doing so sets the stage for a more secure financial future. Remember, even the smallest step forward in investing can lead to significant rewards down the road.