It is no secret that a bank deposit is one of the most reliable tools for saving personal savings. Yes, this is true, but from the point of view of investing and increasing capital, a bank deposit is the least profitable tool.

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This is because the interest offered by the bank on deposits rarely exceeds the annual rate of inflation in the country. And yet, let’s try to take a closer look at this most reliable and least profitable financial instrument. So, the theory.
Meaning
The deposit of a bank deposit consists in the fact that the client of the bank transfers to the bank a certain amount of money on pre-agreed terms. After a certain period of time (previously agreed in the deposit agreement), the bank returns to the client all his money and, in addition, a certain amount, usually equal to a part of the entire deposit. The remuneration or profit on the deposit is measured as a percentage of the deposit amount and is also stipulated in advance in the deposit agreement. This is in theory.
In practice, deposits are “urgent” and “on demand»
First-term deposits are placed for a pre-determined period — for example, three months, six months or a year.
Interest rates (the amount of profit on the deposit) on such deposits are quite high, especially against the background of all other offers of the bank, and the higher the longer the deposit storage period. But the terms of the contract here are quite strict — the client can not collect their money before the agreed deadline. Rather, he can take them away, but the interest will not be charged at the same time. Or they will, but at a much lower rate — as for a “demand”deposit.
The second-deposits “on demand”, is a kind of “piggy bank”. In principle, the money on it (on the deposit account) lies, and even the interest “drips”. Only the size of these percentages is small. The smallest percentage of all possible deposits. It is understandable — the client can take all his money from the bank at any time.
If we compare it with the level of inflation in the country, the interest rate on term deposits can sometimes even exceed this level (in any case, the figures officially announced by the government), but for this you need to meet the necessary conditions.
Do not withdraw money from the deposit before the deadline, do not replenish the deposit, etc., etc. “on demand” deposits are the most reliable from the point of view that they are available at any time, but the profitability of such deposits is minimal. As everywhere else, the principle works — “the more profitable, the riskier”.
Financial institutions — banks, mutual funds, etc. commercial organizations are now quite a lot, and they all strive to get as many customers as possible. Accordingly, new, diverse financial instruments are emerging in the financial services market:
for example, ” top-up deposit»
It is very similar to “urgent”, with the difference that during the deposit period, it can be replenished, as if putting money in a piggy bank. Accordingly, in the next month, a percentage of the profit will be accrued on a new, larger amount of the” body ” of the deposit. A very profitable tool, but banks set the interest rate on such deposits in advance a little less than on term deposits.
It is also a variant of a “term” deposit, but the interest on the deposit is paid monthly. Usually, the bank’s client is issued a payment card for free and a card account is opened, to which the amount of interest is accrued on a monthly basis. A very interesting financial instrument, but its deposit rate is also less than the rate on a term deposit. It is profitable in the event that” on hand ” there is a sufficiently large amount, and a decent use of it in the next year is not expected.
“deposit with capitalization»
A variant of the term Deposit. It differs from it in that the interest on the deposit is accrued monthly and is summed up with the” body ” of the deposit. In the next month, the amount of interest is charged on the already increased “body” of the deposit. The most favorable prerequisites for using this tool are the same as in the previous case.
Today, these are the main types of deposits offered by our banks. It is necessary to emphasize once again that the deposit will not be able to compete with other investment instruments in terms of profitability and profitability, but it is a very reliable investment of a significant amount of free funds for the next year.

