From traditional accounts to certificates of deposit, there are multiple ways to grow your savings. Not every option, however, may offer the level of return you desire. Many first-time investors turn to mutual funds to grow their investment income. Before you head to the bank and sign up for an account, take a closer look at the ins and outs of this financial instrument.

A Guide to Mutual Funds

What Are They?

Mutual funds are an investment tool that pulls money together from lots of different investors. The fund, which is professionally managed, uses that pool of money to invest in a variety of ventures, including bonds, securities, and stocks.

What Are the Benefits?

Instead of purchasing stocks and bonds directly through a broker, the fund’s managers decide which financial securities to purchase. Everyone who invests in the fund shares in the returns. Investing in a mutual fund makes entering the market more attainable for the inexperienced because the cost to join is low and the fund’s portfolio of investments, being diverse, is less risky than any single stock issue. 

Because the fund’s managers make all the financial decisions, you don't have to have any previous market experience, and you avoid the stress of having to oversee the day-to-day performance of the fund. 

What Types Are Available?

Types of mutual funds include equity, fixed-income, and balanced funds, but money market mutual funds are the most common because the risk of loss is low. You can invest in a money market account—a blend of certificates of deposit and U.S. treasuries—by itself or as part of an individual retirement account (IRA), which permits your savings to grow tax-free.

Since 1919, Citizens Bank has proudly served the financial needs of residents and businesses across Marshall County, MS. This Member FDIC community bank offers a variety of personal banking services, including money market deposit accounts, IRAs, and certificates of deposit. Learn more about their personal savings opportunities online, or request assistance today by calling (662) 838-2146.