In these modern times, not a day goes by without needing some form of a financial product. These products come in different forms and cater to almost any scenario in life that requires money. However, there is no way one person could own them all.
You don’t need to be a financial expert to know what financial products you need for day-to-day life. Here are the basic ones everyone should own.
Savings Account
A savings account is one of the most basic interests generating accounts a bank or financial institution can offer. You can use it to store and withdraw money. And you will have peace of mind knowing that the money is fully insured. With that said, the interest rate for these types of accounts is extremely low, meaning they aren’t really wealth-building material.
Current Account
Unlike a savings account, current accounts don’t offer any type of interest. They’re just a safe place where you can store your money and access it at any time. They’re also commonly referred to as transaction accounts or checking accounts.
Pension
Having a pension is one of the best ways to save for retirement. A pension is simply a fund where contributions are made over the course of your work life so that you get a monthly check after retirement. The contributions for the pension fund are made by your employer (if they offer a pension).
Debit Card
A debit card is what you receive after opening a current or savings account with a bank or financial institution. It is mainly used to withdraw money from ATMs against the available balance in your account. But you can also use a debit card at POS terminals or online shops when buying things.
Credit Card
A credit card works in pretty much the same way a debit card does. The only difference is that you can’t withdraw money from an ATM and it isn’t attached to any bank account. Everything you purchase using a credit card is on credit, meaning you have to pay off the debt.
Caution is advised when using credit cards because you can easily enter a cycle of debt. But with the pressures of modern life, it is difficult to survive without one since many booking places, online services and online shops require a credit card.
Life Insurance
If you have a family (wife and kids) or any other person that depends on you financially, then life insurance is a must. Life insurance keeps them financially secure when you die (after having paid all your premiums). The insurer pays them a lump sum, which they can use to cover funeral expenses and continue their lives. When it comes to life insurance, there are many types of products that you can get which include term life, whole life, universal life, and even no medical exam life insurance products.
Car Insurance
If you own a car, this one is a must-have – plus, you are required by law to have car insurance. It financially protects you or the third party to an argument from covering the damages of the accident. You are not required to have comprehensive coverage, which covers both you and the third-party, but you are required to have third-party coverage at the minimum.
Home Insurance
No one can deny that a house is a huge investment, and you need to protect it. This comes in handy in situations where something happens to your house. It can cover a multitude of scenarios that could cost you thousands of dollars to fix by yourself, from basement flooding to fires. If you acquired your home through a mortgage, having home insurance is a must.
Conclusion
These are the basic financial products everyone should have. And you don’t even need to be a financial expert to know about them or use them. While not all of them are necessarily a must-have, they do make handling a range of scenarios extremely easy.
