Bank deposits are one of the most popular forms of savings, valued primarily for their safety and clarity of rules. Although they do not allow you to earn a very high profit, their great advantage is the elimination of the risk of capital loss. What’s more, banks these days are outdoing each other in proposals, which means that a bank deposit can be relatively attractive, especially if we look for it through promotional offers. How to find the best bank deposits? Which parameters of the financial product are particularly important?
1. interest rate on the deposit
2. the duration of the deposit
3. security.
It is also worth using online tools in the search for the most attractive deposit – the http://lokatowy.pl/ comparison engine is such an example. It is also worth verifying the current ranking of bank deposits based on information provided by financial institutions.
Interest rate on the deposit
One of the most important factors that one checks when setting up a bank deposit is the interest rate on deposits. The higher it is, the greater the profits your savings will earn. However, it should be remembered that the range of bank deposits is so varied that this parameter can be at different levels. Financial institutions offer, among other things, structured deposits, where the interest rate depends on various factors, and – although you do not lose the paid-in capital – it may turn out that after the indicated time the additional funds will not be too much. So always read the terms of the contract to know what to expect.
Bank deposits can have fixed or variable interest rates. The latter usually applies to deposits set up for a longer period of time, so the interest rate can grow proportionally from month to month.
Also check whether it is worth setting up a foreign currency deposit: http://lokatowy.pl/lokata-w-euro-czy-sie-oplaca/.
Duration of the deposit
Another important aspect is the duration for which the deposit is set up. At the same time, this is the criterion that differentiates a term deposit and a savings account.
While savings accounts allow you to freely deposit and withdraw funds, a term deposit is set up for a contractually specified period. It can be a short-term deposit, such as a monthly or quarterly one, or a long-term one – a year or even several years. Regardless of the duration, interest is capitalized every so often – usually after a calendar month.
In the case of a short contract term, the interest rate on bank deposits is usually lower, but the client gains flexibility in managing his money. Long-term deposits, on the other hand, allow you to earn a higher profit, but this means locking up your funds for a longer period of time. Some allow you to break the deposit before the date indicated in the contract. However, you should always make sure that this does not mean financial loss, additional commission or loss of earned savings.
The possibility of early withdrawal is particularly important, as it may happen that we need our savings earlier than the contract provides. It is worth paying attention to whether the bank offers this possibility, and if so, under what conditions.
Security
As we mentioned earlier, bank deposits are a safe product. This distinguishes them from some products, such as investment products, where the invested money can be lost if the action fails. In a deposit this will not happen. In addition, such savings are guaranteed by the Bank Guarantee Fund, which protects funds up to €100,000.
The above article is not investment advice. All information and data and studies contained in okbr.pl are for informational or statistical purposes. Therefore, they cannot be treated as an encouragement to make a selected investment decision. Nor can they be treated as investment advice or a binding assessment of the investment market or any other financial instrument. Any investment decisions made by a user of the okbr.pl portal are made at the user’s own risk and responsibility. The information contained on the website does not constitute a recommendation and investment advice within the meaning of (art.42 section 1 and art.76) of the Act of July 29, 2005 on investment advice (Journal of Laws 2005 No. 183 item 1538, as amended).
