Finance is the art of managing funds and if you are in a position to give or loan some money to some person then that person will use the money for your benefit. It relates to managing the financial finances of an individual or company and providing financial support to someone. It’s a broad term that’s describing two different activities at once.
If we want to talk about the different types of finance then lets start with saving. Saving is the process of saving or protecting financial resources. There are many financial activities like savings plan, insurance, investment, estate planning and wealth building. There are also several ways of saving like household expenses, income, investments, estate planning, and others.
The next type of finance is investment. Investment is the buying and selling of securities either stock or other options. The investment can be made on stock, bonds, mutual funds, property, and many other financial activities. To get better corporate finance assignment help you must get trained with the financial aspects of investing.
Another major type of finance is finance related to banks and finance activities. Banks are financial services providers who lend money for various financial activities. It includes saving, lending, deposit, banking, credit, and many more financial activities. With the popularity of banks, there are numerous banks around the world. Some of the well known banks are: Bank of America, Chase Bank, Wells Fargo Bank, CitiBank, Branch Bank, Wachovia Bank, HSBC Bank, Fleet Bank, Credit Union Bank, MBNA America, Fifth Third Bank, Sun Trust Bank, Key Bank, Branch Bank, Key Bank, PNC Bank, US Bank, Trustmark Bank, and Branch Bank.
Saving is one of the most important aspects of finance. People save to ensure that they have a comfortable lifestyle. This is in terms of liquid cash and savings accounts. There are various forms of saving like certificates of deposit (CD), savings account, money market funds, and bond funds, etc. CDs are long-term investments that offer higher returns but require relatively low liquidity.
Savings accounts include CDs. These come in both fixed and variable interest rates. The variable interest rates are flexible and provide higher yields as compared to the fixed rate CDs. Money market funds are popularly known as high-risk funds and carry high charges. People looking for finance can go for CDs, savings accounts, money market funds, or certificates of deposits (Doozies).
Corporate finance involves the movement of cash flow through various channels. Cash flow is the income generated within a day or over a period of time. Cash is created at the bank during the day by lending it to the borrowers. Commercial banks lend funds to the manufacturers of their products, and to the suppliers of the same. Corporations use these banks for purchasing equipment, paying employees, selling property, paying leases, etc. All this leads to an increase in cash flow.
Corporate and personal finance involve various activities. Banks lend money and use the proceeds to either earn interests or to purchase company shares and bonds, or to make lending and other financial transactions. For instance, a bank may use a commercial bank account to make purchases of fixed assets such as machinery and plants. On the other hand, individuals use bank accounts for saving for future expenses and for debt repayment.
A savings account is a facility provided to customers to accumulate savings. The amount saved can be used either for current expenditure or for making future purchases. The rate of interest on the savings account is usually lower than that on the market. Most of the savings accounts are unsecured, which imply that there is no liability for the lender if the customer fails to return the principal amount. The term of the loan is usually three to five years. The advantage of such an arrangement is that the income minus the interest rates are passed on to the customers, resulting in a saving in their total income minus the interest rates.
Most savings banks earn interest from the cash flow in its loan accounts. Long-term loans are made on the basis of security, whereas short-term loans are made on the basis of credit availability. The repayment terms are usually long-term, since banks prefer to have their capital in place for a long time.
A saving account is available to everyone in UK whether he has a job or not. Banks offer a variety of saving options to customers. These include direct debits, deposits and lottery winnings. Personal finance is becoming an essential part of our lives as we spend less on buying goods and services. This is mainly due to the higher savings that individuals are able to make through personal finance. It has been seen that people living on savings accounts have more purchasing power than others.