Since a savings account produces interest on what you pay into it, some people might consider putting money into a savings account to be an investment. However, since inflation rates in the United States tend to outpace savings account interest rates, this will not actually produce a growth of wealth most of the time. Other more lucrative options can help you to actually make money with the money you have.

Stocks

When a company becomes a corporation, it sells partial company ownership in the form of stocks. Some corporations are publicly traded, meaning that people buy and sell their stocks openly on the stock market, while privately owned corporations place limitations on how their stocks can be traded. Either way, investors make money first by getting a share of the company profits in the form of dividends and by selling their stock after it has appreciated in value. However, while investing in stocks can be very lucrative, it also can be very costly; if you invest your money into a company that fails, you cannot get your full investment back.

Bonds

Bonds are investment instruments that governments and companies use to raise funds for expansion projects. Sellers like to issue bonds because it allows them to raise funding without selling ownership in the company, and the advantage to buyers is that bonds come as a safer investment than stocks. This is because, instead of getting a percentage of company profits, bondholders are guaranteed to get a specific amount of money at a specific time. This can come in the form of multiple recurring payments or one lump sum payment. If a corporation faces liquidation due to financial failure, bondholders receive what they are due before stockholders do. The safest bonds are usually government bonds, but being safe investments, they also tend to yield the lowest interest rates.

Commodities

A commodity is a simple mineral or agricultural product the price of which varies little across the market from one producer to another. Like stocks and bonds, commodities can be bought and sold easily on the open market. Some examples are gold, silver, copper, wheat, coffee, beans and corn. Since the prices for these products tend to change from one day to another, investors can often make a large sum of money by buying and selling them. For instance, if you buy several tons of coffee beans and then a natural disaster wipes out entire crops of coffee in South America, the price at which you can sell your coffee beans will skyrocket. However, like stock trading, commodity trading can be very volatile and risky. Making money through commodity trading takes tenacity and large amounts of research.

Mutual Funds

A mutual fund is a financial organization that takes the money of a large number of investors, pools it together, and invests it into a large number of different investments. One advantage of mutual funds is that they allow investors to have seasoned professionals pick their investments for them. Another advantage is that by spreading investments over a number of different instruments, mutual funds minimize the risk of financial disaster that can come from a bad investment. Being relatively safe investments, mutual funds can have lower returns than direct stock, bond and commodity investments, but they tend to bring stable, steady returns that are higher than what you would normally get from a savings account.

Entrepreneurship

The method of investing your money that has the possibility of bringing the highest returns is entrepreneurship. Starting your own company allows you to keep the bulk of the profits. It also gives you direct control over the success or failure of your investment. However, make sure that the business you start is something that you enjoy and that matches your expertise. Otherwise, you may not be able to do what it takes to make a profit on your investment.