Bank is a financial institution where financial affairs or activities are carried out. Banks involve in financial activities such as accepting deposit, making payments, acting as underwriters, serving as financial adviser to there customers,currency exchange, wealth management, giving long-term and short-term loans, investing on behalf of there customers and also safe keeping of values to mention few.
Banks can be in differs natures such as commercial banks (which is Common and closer to the public), bank of agriculture, bank of industry etc. The activities of banks are regulated by CBN for the case of Nigeria. It should be noted that interest paid by banks depends on the type of account a customer operates, for instance, the interest earn on current accoubt is greater than that of savings account.
The act of putting capital of fund in a place in exchange for a return or profit over the capital invested is called investment.
Investment can also take place on the purchase of financial asset. Investment can be in differs forms such as Autonomous investment which are investment made particularly on public property especially buildings, house, and other infrastructural facilities. In this type of investment, the ROI (Return on Investment) remain unchanged irrespective of the income level in the economy.
Another is gross investment which is usually associated with factory plant and machinery and factory building, this are capital asset in nature. The capital spent on the procurement of those assets are investment.
Financial investment which is the most common type of investment which involves the purchase of financial securities, shares, bonds and the likes.
Others includes planned and unplanned investment, real investment, induced investment and so on.
Bank investment are platforms made available by banks in order to enable there customers invest in them. As banks are know to also function as investment medium for customer, there are some ways provided by banks for investment such as investment in bonds, mutual fund, stock, Exchange-Traded Funds (ETFs), certificate of deposit (CDs). Banks provide investment platform through financial instruments which are debt-based financial instrument, equity-based financial instrument and special consideration. Each financial instruments are explained below:-
The debt based financial instrument :-this is in form of long or short term loan facility granted to the bank. this can be subdivided into two branches which are short term debt based financial instrument which the kind of investment under this category last for nine months to a year, hence, the are in form of treasury bill and commercial papers. And also long term debt based financial instrument are one year and beyond which instrument includes bonds.
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