In deposit terminology, the term Investment refers to the process of placing funds to obtain an asset with the expectation of receiving future gains. Gains that may come from the asset invested in could be in the form of interest, income or appreciation in the value of the asset.
For example, a financial Investment could be made in instruments that include certificates of deposit or CDs, stocks, bonds, derivatives and foreign currencies. Investment will often take place when an individual or company has extra liquid funds available that it wishes to obtain a return on. Investment decisions are usually based on an analysis of the intended Investment asset, vehicle or instrument that assesses the degree of risk involved relative to the return anticipated from making the Investment. As an example of an Investment analysis, the expected return from investing in a certificate of deposit would be the interest promised to the investor, while the risk would include the chances of default by the financial institution that the funds are deposited with that could result in the loss of both the principal invested and any accumulated interest.