Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term

Protect Your family’s financial future with Kotak e-Term. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more


Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

What are Financial Assets & their types?

Financial assets are defined as investment assets with a contractual claim to the value of what they represent. The list of financial asset types is shown below.

  • Jan 18, 2023

A contract is made between two parties whereby one entity that invests its money will get some contractual right to receive returns in the form of dividends, interests, etc., from another entity where the former invests its money. Bonds, mortgages, and cash and cash equivalents are a few examples of financial assets. Financial assets are also liquid assets whose values are derived from contractual claims.

    Key takeaways

    Types of financial assets

  • Cash, as well as its equivalents
  • Equity Stock
  • Preference Shares
  • Debentures
  • Accounts Receivable
  • Mutual Funds
  • Derivatives
  • Insurance Contracts

Financial assets are intangible financial instruments that are more liquid in nature than the other assets of the company. These financial assets typically take the form of receipts, legal documents, certificates, etc., and receive their worth from contractual claims. They can be quickly converted into actual money. Two parties enter into a contract with financial assets that grants the party who invested the money (the investor) the right to obtain the financial benefit from the party in which the money was invested. Bonds, derivatives, fixed deposits, equity shares, and insurance contracts are a few types of financial assets.

Types of Financial Assets

Cash, as well as its equivalents

These are the company’s financial assets, which include its cash balance, the balance in its bank accounts, checks from customers that the bank, commercial paper, etc., have not yet cashed. These assets are highly liquid current assets.

Equity Stock

When a firm buys equity shares issued by another company, the equity shares become a part of the company’s financial assets. This will be the owner’s equity for the company that issued the equity shares and a financial asset for the company that bought the equity shares. The right to receive dividends from the issuing company, which are paid to the investor, is established by this financial asset.

Preference Shares

As with equity shares, holders of preference shares have the right to receive dividends, but at a set rate based on the number of shares, they have purchased from the company issuing the shares (the issuing company). If the issuing company is wound up, preference shareholders have the right to receive the assets before equity shareholders can purchase the assets.


Debentures are financial instruments that grant holders the right to collect interest on the money they have invested at a specific rate and on specified due dates. The sum invested is also returned to the debenture holders at maturity. And debenture holders have the right to claim the assets of the issuing firm before preference shareholders, and equity shareholders do when the issuing company is wound up.

Accounts Receivable

The selling party has the right to collect payment from the party who purchases their product when sales are made on a credit basis (known as Debtor). Therefore, that debtor falls under the category of accounts receivable for the selling party.

In other words, these are assets that establish a right to the money in exchange for credit sales made by the company within the credit period granted by it and also demonstrate the right to interest if the payment is delayed, meaning that the buyer (Debtor) must repay the purchase price plus the interest amount, which is calculated at the rate determined at the time of sale.

Mutual Funds

A mutual fund is an investment vehicle administered by an asset management firm that solicits contributions from small investors in exchange for mutual fund units. As a result, after receiving funds from these investors, the mutual fund invests them in the stock market, building a diverse portfolio. Mutual funds later provide investor returns in the form of capital growth and dividends/interest.


Derivatives are financial instruments, or we may say that they are contracts between two parties, where the value of the contract is derived from the value of the underlying asset, which could be an index, a commodity, a stock, an interest rate, a currency, etc. Options, futures, swaps, and other derivative instruments are most frequently employed.

Insurance Contracts

Insurance contracts are a different category of financial assets where one party (known as a policyholder) pays a premium to the insurance company in exchange for the right to compensation if a business-threatening catastrophe occurs in the future. For instance, if a policyholder has a policy that entitles them to compensation in the event of a fire, the insurance company will reimburse the policyholder’s business for any losses sustained due to the fire.


Therefore, the company’s financial assets are the most liquid assets and meet its cash needs. These intangible financial assets are crucial for the company’s ability to generate income through dividends, interest, or any other asset, even if they cannot be physically touched. Examples include equity shares, debentures, bonds, preference shares, derivatives, accounts receivable, cash and cash equivalents, and invoices. These can also be legal documents, certificates like share certificates, invoices, etc.

In this policy, the investment risk in the investment portfolio is borne by the policyholder.

Kotak e-Invest

Download Brochure


  • Return of Mortality Charges*$
  • Enhanced Protection
  • Multiple Plan Options
  • Zero Premium Allocation Charges
  • Tax Savings^

Ref. No. KLI/22-23/E-BB/521


- A Consumer Education Initiative series by Kotak Life

Similar Articles

What is SIP Calculator, And How Does it Work?

उच्च रिटर्न प्राप्त करने के लिए सर्वश्रेष्ठ इन्वेस्टमेंट विकल्प

Do You Know the Difference Between Savings and Investment?

Corporate Bonds: Meaning, Types & Benefits

What's Better for Your Child's Education? Child Plans or Mutual Funds?

ULIP Benefits You Can Avail from Early Investing

What is the Time Value of Money (TVM)?

What is a Credit Score and How Can Insurance Help You Improve it?

Top 5 Investment Options in 2022 for Healthy Returns

Why are ULIPs One of the Best Tax Saving Instruments?

ULIP vs FD - Which is Better and Why?

Important Questions You Must Ask Yourself When Buying a ULIP Plan

How to Use Recurring Investment Strategies to Build Wealth?

ULIPs Investment – A Boon or Bane?

Asset Allocations in ULIP - Know the Top Benefits

Four Financial Lessons from The Vedas on Living Life to The Fullest

Can ULIP Policy be Transferred?

Creating a second source of income with life insurance

Why ULIP is Better Investment for Long-Term Wealth Creation?

Best Investment Options in India in 2022

Endowment Plan vs Fixed Deposit?

Safe Investment Options with High Returns for FY 2018-19

How Do One-Time Investment Plans Work?

ULIP Plan as a Gift

Here's Why it's a Good Time to Explore ULIPs as an Investment

How To Invest Money In ULIP?

Debt ULIPs vs. Debt Mutual Funds: What's the Difference?

What is a Savings Plan and What are is Benefits?

The lesser-known facts about ULIP policy that customers should be aware of?

Receiving regular payouts at various stages of life

Which are the Best Investment Plans for Indian Senior Citizens in 2022?

Rate of Interest on Different Investment Plans in India

How To Diversify Portfolio In 2022?

How to Manage Inheritance Money?

What is ULIP and Its Benefits?

Investment Options for NRIs in India

How is the Compound Annual Growth Rate (CAGR) Calculated in ULIP?

Which are the Best ULIP Plans in India for Children?

What is Direct Investment and its Types?

6 Important Tips to Maximize Your Gains with ULIP Investments

8 Important Tips to Maximize Gains with ULIP Investments

How to Manage Your Portfolio Like a Professional?

What are Mutual Funds?

Why Should You Build an Emergency Fund?

Benefits of ULIP as a Child Insurance Plan

Customising investments to manage your wealth

Savings Plan for Grandchildren

What are the Best Investment Options for Students in India?

What are the Best Short-Term Investment Plans with High Returns?

ULIP Investment Strategy: Top Tips to Improve Your ULIP Gains

Why Do You Need A ULIP Plan - All You Need To Know

Best One-Time Investment Plans in India

Long Term Savings Plan - Best Savings Investment Plans in India

Difference Between Guaranteed Savings Plan and ULIP

What is ULIP Plan, and How Does it Work?

Planning for Your Child's Higher Education? Explore These Investment Options

Early Investing and the Power of Compounding

How Can ELSS Funds Help You Save Tax & Create Wealth?

How to Plan Savings from Salary?

Best Guaranteed Returns Investment Options to Meet your Financial Goals

Building wealth through regular investing

Why Should I Invest in ULIP?

How to Cancel ULIP Policy?

Planning Financial Goals and Objectives of Financial Planning

What is Equity Mutual Funds: Meaning, Types & Benefits

How to Increase Net Worth Along with Family Protection

How Much Wealth Can You Create from ULIP in 10 years?

How to Fulfil Your Financial Goals in the Next 10 Years?

Best Investment Options to Cover Your Child's Education

4 Benefits of ULIP Fund-Switching Feature

Which is a Better Investment - Mutual Funds Or ULIP?

Short Term and Long Term ULIP Plans for Wealth Creation

Top 10 Investment Strategies to Create Wealth

What is the Importance of Saving Money?

How to Make Your Financial Portfolio?

How to Choose the Best ULIP Plans to Invest in 2022?

ULIP as an Investment for Your Child

Best Investment Plans for Children - Secure Your Child's Future

Why Should You Invest in Term Insurance And ULIP?

Factors Affecting Stock Markets

Are Investment Returns Guaranteed in a ULIP?

ULIP NAV Meaning & How is the Return Calculated in ULIP

Learn About Safe Investments with High Returns in India

Are Money Back Policies Helpful? A Complete Guide

Top 5 Principles That Need to be Followed for Wealth Creation

Can ULIP Help in Achieving Short-Term Financial Goals?

Different Types of Endowment Plans

What are the Best Investment Options for Young Adults?

उच्च रिटर्न प्राप्त करने के लिए सर्वश्रेष्ठ इन्वेस्टमेंट विकल्प

Why Should Parents Invest in Endowment Plan?

Learn About Safe Investments with High Returns in India

Which is Better – FD, Mutual Fund, SIP, or ULIP?

What are loyalty additions, and how do they work in a ULIP?

How Does an Endowment Plan Work?

What are the Best Investment Options for Beginners or Amateur Investors in India?

What is Compound Interest, And How Do I Calculate it?

Are Gains from ULIP Sale Taxable?

Beginner's Guide to Wealth Creation: Meaning, Strategies, & Importance

How to Plan your Investment to Achieve Periodic Financial Goals?

What are Tax-Deferred Savings Plans?

How to Calculate Your ULIP Returns?

ULIP Capital Gain Tax: Check Tax Norms for Capital Gain on ULIPs

Why is Portfolio Diversification Important? How to Diversify Your Portfolio?

यूलिप के फायदे (Benefits of ULIP in Hindi)

How Is ULIP Different from Other Life Insurance Plans? Where Can I Invest - ELSS, ULIP, or PPF?

Why Should You Consider Guaranteed Savings Plan for Long-Term Investment?

Investments Options to Buy a house in India

What are the Best Investment Options For Females?

How to Plan Your Child's Education - A Step-by-Step Guide

Difference Between Passive and Active Investing

What is Money Management? Definition & Example

Importance of Portfolio Management

Successful Financial Planning for Urban Women

Got a Salary Hike? Here’s How to Plan your investment further

Is This The Right Time To Invest In ULIP? Why or Why Not?

What are Index Funds and How Do They Work

What is better - Guaranteed Savings Plan or Fixed Deposit?

Does Rupee Cost Averaging Work In Unit-Linked Insurance Plans?

Why Are ULIPs Called Flexible Investments?

What is ULIP Renewal?

What is Fund Switch in ULIP? And ULIP Fund Switching Techniques

How to Start Saving Money in 10 Simple Ways?

How To Track ULIP Performance?

Things to Know Before Buying an Endowment Plan

How Can a Legal Nominee Claim ULIP Benefits are the Policyholder’s Death?

What are Some of the Safest Investment Options in India?

Top 10 Investment Plans Available in India