A financial product is an arrangement/ instrument/ contract that represents a financial means by which a person (natural or legal) can make an investment, borrow money, or save money, or a combination of multiple purposes. Financial investments can be made by means of shares of stock or equity instruments. Borrowing money involves the use of products such as loans, bonds, or credit cards. Saving money may involve lending money to banks through term deposits, which entail both safekeeping of funds and often the payment of a certain interest rate.
Generally, financial products can be classified as per the following:
- Equity products: shares, private equity holdings, etc.
- Debt products: bonds and other debt instruments (debentures, notes, loans, etc.)
- Hybrid products.
- Investment products.
- Participation products.
- Derivative products: swaps, futures, options, forward contracts, etc.
- Capital protection products.
- Currencies.
- Insurance policies.
- Mutual fund shares.
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