There is a fundamental rule when investing: high returns are associated with a high risk. The longer the capital is tied up for, the higher the interest rate is as a rule. You should be particularly cautious of promises of high returns, which bear no relation to the normal market returns. You may find the interest rates and exchange rates on the website on the Oesterreichische Nationalbank (OeNB).
Consider in advance what amount you wish to invest and above all you are able to afford to. In any case check what your savings are, your running costs and how much you have available for unforeseen expenditures. Remember that in some forms of investment your funds are tied up for a longer period of time. Releasing funds early is often associated with costs. Make sure that you also have the product explained in detail in this regard.
There is a fundamental rule when investing: high returns are associated with a high risk. The longer the capital is tied up for, the higher the interest rate is as a rule.
As a guide it is always good to ask about the return that can be obtained from a low risk investment by a blue chip issuer or debt instrument (e.g. government bonds). This is your benchmark. The difference in interest rate of the investment you wish to make compared to this benchmark is a good indicator for the risk that you are taking.
Furthermore, the financial services provider is obliged, to draw up an investor profile for you. This is a self-disclosure in which you should inform the financial services provider about
The financial services provider requires your information to be able to make an overall classification, which allows you to be allocated to a target market. Since in the implementation of MiFID II every product is also required to allocated to a target market, it is intended to ensured that the products offered ultimately correspond to your preferences, requirements as well as your risk appetite.
Savings books and building saving are considered to be relative safe. They have a lower yield but greater security. The only risk to bear in mind in the case of a savings book is the risk of insolvency of the bank. In this case, deposit protection applies to savings books and building savings contracts.
Read more about this in the https://www.fma.gv.at/fma_aktuell/fma-fokus-anleihe-vs-sparbuch/FMA spotlight on Bonds vs Savings Books
Over and above the out and out hedging of risk there is also a more long-term interest bearing savings element. The claims of customers are guaranteed by the cover pool reserve (Deckungsstock). There are two different types of endowment life insurance:
Read more about this in the FMA Focus on Life Insurance
A share is a security that securitises a unit of in the share capital of a stock company. You therefore hold a share in the company.
The price of share is based on supply and demand on the stock exchange and represents the value of the company. When trading in shares the prospects of returns are higher, however there is also a higher potential for losses, and in the worst case a total loss. In addition it should be noted that there are also enormous differences between individual shares with regard to both risk and return.
The historical performance of securities and fund-based products provides no indication about their future development.
Bonds are securities with a fixed interest rate. An investor invests their money for a certain period time and receives interest for doing so. At the end of the investment term the investor receives their capital back.
Read more about this in the FMA spotlight on Bonds vs Savings Books and in the FMA Focus on Real Estate Bonds.
Investment funds are instruments with which capital is usually collected from a number of retail investors, and invested on the financial markets. The capital is primarily invested in the form of transferable securities, as well as deposits at banks, commodities or other investment funds. The investor is the owner of a part of the fund. Depending on their design there are for example money-market funds, pension funds, real estate funds and equity funds.
Make sure in the funds database, that the investment fund is authorised in Austrian for public distribution. In the event that no such authorisation exists, you must be aware that the fund product has not been subjected to an authorisation process, and therefore is not supervised by an authority.
Derivatives are financial instruments, the performance and price are dependent on the price of other financial instruments (the underlying such as, for example, commodities, interest, currencies, …). Derivatives are used to bet on how the price develops in the future. There are various types of derivatives – for example options, futures, swaps, … – that are fitted with various rights and obligations.
The FMA Focus on Product Intervention informs you about restrictions and bans of financial products.
Crypto assets are a medium of exchange, that are created, managed and transferred using a mathematical, computer-based procedure. Currently there are already more than 200 different crypto assets offered, with the best known examples being Bitcoin, Ethereum, Ripple and Litecoin.
Read more about this in the FMA Focus on Bitcoin and Co.
Consider that there are also products offers on the financial market, that lie outside the supervision of the FMA. For further information, please read: