What is a fixed interest investment?

Question

What is a fixed interest investment?

Answer 1

Any investment where the percentage of the rate of return (or interest rate) in the contract. For an specified amount, and for a specified time.

Answer 2

This is where your investment has a set return for a given period of time.

An example of this would be a 30 year fixed mortgage.

The bank loans you money at a set percentage rate, say 6%.

You pay six percent on the borrowed money for the life of the contract. The bank has made a fixed interest investment with you.

A bond can also be a fixed interest investment. Say you buy U.S. Government 10 year bonds with a yield of 4.5 percent.

If you buy 10 thousand dollars worth you will receive 450 dollars a year for ten years and then get your ten grand back.

You gave your money to the government and they gave you a fixed return.

Hope this helps!