The first law of the financial sphere says that money should work for augmentation. The most profitable and correct way to put money into circulation is to make a deposit in a bank. This is not only a method to secure your money, but also an opportunity to receive a constant income (interest).
Deposit - what is it?
To maximally correctly and simply characterize such a monetary transaction as a deposit, you need to turn to financial terminology. The deposit is a special kind of loan. If a consumer loan is a bank loan to a customer, then bank deposits are loans that customers voluntarily give to their bank, with the condition of obtaining a percentage.
Such a financial transaction is mutually beneficial for both parties, both to the depositor and the bank. Saying what a deposit is, the depositor gets the opportunity:
- lawfully put free funds into circulation;
- receive a guarantee of money safety;
- to use the interest rate.
And the bank gets the opportunity:
- increase your financial turnover;
- increase the volume of loan funds for the needs of the population;
- strengthen its position in the financial market.
Deposit deposit - the bank's debt to the depositor, and is subject to mandatory return of funds to the owner after a certain time. Before you take your money to the bank, decide what kind of contribution you are interested in. It is necessary to know what distinguishes a simple deposit to a bank with interest from a deposit.
What is the difference between a deposit and a deposit?
The deposit includes a voluminous definition, and the contribution is one of its main varieties. The first difference between the deposit and the deposit is that only cash can act as a loan. That is, the client of the bank opens an account, deposits a certain amount of money on it and places it at the disposal of this banking organization for a strictly defined (or perpetual, on demand) time. For the specified period of storage, the bank reserves the right to dispose of these funds at its own discretion.
Types of deposits
The deposit in the bank has several varieties, depending on the terms of the contract between the financial institution and the client. So the bank can offer placement of money with the condition:
- accumulative deposit - deposit with replenishment;
- line savings account;
- deposit with the demand condition;
- savings;
- multicurrency deposit;
- deposit with capitalization;
- security deposit;
- pension;
- investment.
Each type of contract has its own characteristics, as well as its nuances. Before, to give preference to this or that kind of investment of money, it is worth to study in more detail what rights and obligations the client (depositor) will have, and what advantages and rights the bank itself receives under such agreement.
Cumulative deposit
If you consider all the profitable deposits in banks, then a savings deposit is a good alternative to urgent. From the first option, this is characterized by the ability to make constant "infusion" of funds into the main account - a deposit with replenishment. That is, by placing a certain amount in the bank at a percentage, the client at his own discretion can gradually increase the body of the deposit by placing new deposits on this account.
In this case, too, the condition of placing money on a term strictly stipulated in the contract or for a period of demand deposits also applies. The only nuance is that the client undertakes to constantly replenish the account for a certain amount (you can more, but not less) specified in the contract. The rate for such a deposit will be different depending on the conditions that the bank provides the client.
Short-term deposits
Among all products offered by the bank, it is worth paying attention to another profitable deposit - short-term. A feature of such a contribution in its term of validity. He means placing a large amount of money on him for a very short time. The main idea of such a contribution is the opportunity for the client to secure a large amount of cash between serious monetary transactions. More often such a deposit is used by the population:
- if desired, quickly obtain additional income from a large amount of money;
- secure a large amount of money from thieves;
- when selling and buying expensive movable and immovable property.
The easiest way to track an operation is with this example. An individual performs a transaction of selling an apartment. Payment is made in cash, that is, a large amount of cash is present in the hands of a person. To store how much cash is at home is unsafe and then the client comes to the bank with the intention of making a contribution. If in the near future, the depositor is to make a major purchase, it will not be profitable for him to enter into a contract for a certain period of time and then the bank provides him with a product under which the client can open an account for several days.
Demand Deposits
Another popular type of cash turnover through the bank is earnings on deposits. So, in the presence of a large amount of money, a client can open an account and make a contribution on the condition that you can use the finances at any time. Such a deposit is particularly popular as one of the varieties of an urgent savings deposit or a contribution with capitalization. So the client, deposited a large sum of money into the account, under interest, after a while has the opportunity to withdraw or add a certain amount.
Such a bank product is convenient if an individual, if there is a large amount, does not plan to make a major purchase in the near future. Money lies on the account in its original form, the customer can add (well, or not add) to the account of the facility, but be able to withdraw interest at any time. There is an opportunity to use all the contribution or its part at any time at will.
Benefits:
- there are no restrictions on the amount of the deposit;
- complete freedom of action of the client.
Disadvantages:
- conditions are unprofitable for small amounts;
- the interest rate is low.
Profitable from the financial side of such a product will be the client only if a very large amount of money is placed. With a modest amount of deposit for interest accumulation, it is worth choosing another bank product. Demand deposit will be convenient for long-term accumulation or as a children's contribution "up to adulthood".
Savings deposits
Understanding the question of what a deposit is, it is worth paying attention to one more type of service. Such a bank product as a savings deposit is profitable only when a large amount of money is placed on the account. In this case, the depositor's goal is the interest income from the deposit. The body of the deposit must be stable throughout the term specified in the contract. Such a deposit can not be withdrawn from the bank at any time, only after the expiry of the term under the contract. This choice of deposit requires strict compliance with the rules.
Multicurrency deposit
It is important to know what a deposit is in a multi-currency option. Unstable position of monetary units makes banks look for and create new profitable offers for customers. So a multicurrency deposit will allow the client to use the currency conversion within the deposit at his own discretion. Financial practice shows that deposits in foreign currency are the most profitable investment.
Deposit with capitalization
Urgent savings deposit - belongs to the category of the most convenient and easiest for the client options for placing money in the bank at interest. The main advantages of this choice include:
- the ability of the client to monitor all transactions with a deposit;
- the right to dispose of the deposit at any time at its discretion;
- receive a higher percentage of the bank;
- the opportunity to withdraw money at any time;
- the accrual of interest occurs on the real amount on the account (constant capitalization of interest).
The condition of constant interest capitalization is the most profitable deposit if the client does not withdraw funds and accrued interest for a long time. Then with a gradual increase in the body of the contribution, the percentage also increases. In the course of increasing the amount, the interest accrual increases on the deposit account.
Security deposit
In order to fully appreciate the picture of the pledge policy, one must have an idea of what the deposit means, in which the deposit body is not just a cumulative deposit, but also with a safety deposit. So, to give a definition of a deposit deposit is easiest with a specific example. Most often this kind of deposit is used when renting housing or other movable and immovable property. The owner, the landlord, in order to insure his property against the human factor (damage to property, failure to pay utility bills, etc.).
Pension deposit
There are options when a person needs to use long-term deposits. What is a pension deposit - such a banking product can be formed over several years. This is the most profitable deposit with replenishment. A few years before retirement, the client of the bank opens a savings deposit account, to which there are permanent deductions from the card for payments (salary).
Upon retirement, the client has the right:
- Use your contribution at your discretion;
- add the body of the deposit at discretion;
- just take interest once a month.
A retirement deposit may also imply a deduction of interest once a month on a client's pension card. This choice of deposit requires a thorough familiarization with all the conditions that the bank offers. It is important to pay attention to the terms and conditions of the deposit insurance. The risk is that the bank can "burn out" and then the savings of the depositor will be saved only by well-designed insurance.
Investment deposit
If the client is interested in the question of how to make money on deposits, the bank provides him with the next product - an investment deposit. This is a relative innovation in the post-Soviet financial market. The basis of such a deposit is that the usual conditions include the terms under which the client assumes the obligation to purchase a share of the investment fund. The advantage of such a deposit is that if the market is growing, then the client is in income, but if the market is down, the customer loses money. This choice of deposit is acceptable only if the client is aware of the advantages and risks of playing the stock exchange.