Invesments Include Stocks, Bonds and Mutual Funds

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FDIC Consumer News – Spring 2008 – Watch Your Investments


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Practical Advice for Everyone on How to Save and Manage Money


Remember that investments can lose value. Investment products include stocks, bonds and mutual funds. Over the long term, investments might produce higher returns than bank deposits. However, investments are not deposits, they are not FDIC-insured — not even the ones sold through FDIC-insured institutions — and they can lose value. Because of the risks associated with any investment, always deal with a reputable, licensed salesperson and research the product before making a purchase.


Certain annuities are a type of investment. In general, an annuity is a contract with an insurance company. The consumer makes one or more payments to the insurer, as an investment, and the insurer agrees to make a series of income payments to the consumer as long as he or she lives. Be particularly careful before investing in "variable" annuities, which frequently come with high fees and penalties if you withdraw money early.


Especially troubling have been reports of marketers steering people into annuities that are unsuitable for them. The National Association of Insurance Commissioners has published a consumer alert to help consumers, especially seniors, better understand annuities and recognize questionable sales practices. Read it online at www.naic.org/documents/consumer_alert_annuities_senior_citizens.htm


There also have been reports of marketers making false statements about the FDIC — such as claims that the FDIC doesn't have the financial resources to protect insured deposit accounts — as a way to sell investments or annuities to consumers.


Spring 2008 | Comparison Shop | Credit Reports for Free | Save More Spend Less | Keep Banking Costs Down | Understand FDIC Insurance | Investments Can Lose Value | Be Cautious When Borrowing |
Prepare for the Unexpected | Protect Against Fraud


FDIC Consumer News is published by the Federal Deposit Insurance Corporation


FDIC Consumer News is produced quarterly by the FDIC Office of Public Affairs in cooperation with other Divisions and Offices. It is intended to present information in a nontechnical way and is not intended to be a legal interpretation of FDIC or other government regulations and policies. Mention of a product, service or company does not constitute an endorsement.


Find current and past issues of FDIC Consumer News at http://www.fdic.gov/consumernews. Refer to this same index to locate the issues that are specially formatted for being reprinted in any quantity.


To receive an e-mail notice about each new issue of FDIC Consumer News posted on the FDIC Web site, with links to stories, follow instructions posted at www.fdic.gov/about/subscriptions/index.html.


Last updated on 05/13/2008

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