Investing For Beginners – Free Investment Articles and Tutorials

Every successful investor knows the basics of investment. Savings plans are one of the most important concepts that need to be mastered before you head out into the financial world. A brief discussion about the different savings plans can help you will be beneficial to learn.

In any savings plan, the term AER is an important term. It refers to the “Annual Equivalent Rate” of interest that you receive on your savings. This means a percentage of your money that you will get paid at the end of the year!


There are basically three savings plans that offer some kind of compounded interest for the beginning investor. The three savings plans that incorporate AER are Fixed term depositing, balanced savings plans and sustainable investment plans.

Fixed term depositing is a savings plan where you turn your money over to the bank for a certain period of time. The amount of time is usually one year or more. The longer you leave your money in the bank, the higher your AER will be.

A balanced savings plan involves two or more investments that go together in one savings plan. The bank will choose the investments for you and you will simply turn over your money. The bank promises to give you a certain percentage of the profits usually from the stock market or other property investments.

Sustainable investment is for people who are interested in trying to make a “positive change” in the world. Environmental concerns are a big part of sustainable investment plans and many people sleep a lot better knowing that the rainforests and the ozone layer are not being destroyed by their investments.

Understanding your AER and the basic savings plans is a great start for understanding investments. Next time you visit your bank, make sure and ask the manager what kind of savings plans they offer and what the AER is on each plan. A little knowledge can go a long way!

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