What Are Securities In Finance

Securities are financial instruments that are tradable or can be sold or bought. Shares and bonds are considered to be securities and can be transferred to a person. While long term deposits like fixed deposits cannot be transferred to another person and therefore cannot be called securities. Securities have financial worth that can be traded in the public market. There are different types of securities like debt securities and equity securities.

Debt securities involve borrowing money, for example, a bond. Here you lend a certain amount of money and once it reaches its maturity, you will get back the principal amount that you invested along with the interest you collected over time. These bonds are usually government or corporate issues. Equity securities represent ownership held by stakeholders in a company as stocks.