There are several types of investment accounts that EBHC has used or will use in the future. The purpose of these accounts is to earn a higher interest rate than the typical checking or savings account yet not expose EBHC to undue risk. Like all regular accounts, EBHC chooses socially responsible investment accounts. Below is a list of the types of investment accounts EBHC has used in the past or is currently using:
- CD (Certificate of Deposit): This is a higher interest "short term" savings account that many local banks offer with a "lock-in" interest rate. This means that when you invest into a CD you choose the amount of time you want to leave your money in the account (3 months to 5 years) and based on that time frame you are guaranteed a specific interest rate. As long as you don't withdraw your money before the time frame you agreed to your interest rate will not go up or down. RISK LEVEL: There is no risk of loss as long as the bank chosen is federally insured. The only risk is if EBHC were to invest in, for example, a six month CD and needed to withdraw the money during those six months. There are penalties for early withdrawal which are usually a drop in the interest rate.
- MONEY MARKET ACCOUNTS: These are a kind of glorified checking account, or hybrid between checking and savings account. They usually have a lower interest rate compared to CD's, but with a money market you can withdraw money up to a certain amount (like a checking account). Money market interest rates will also change with the most current interest rates which would avoid the investor being locked into a certain rate.
- MUTUAL FUNDS: These are direct investments in the stock and bond market. An investment advisor or manager creates a portfolio of stocks and bonds that, ideally, are varied enough that when one or more stocks or bonds are low in value, the others are higher in value which ensures a continual growth in the investment