The term fiduciary deposit literally means a trust deposit. It involves opening an account on behalf of one bank in another. The depositor's name does not appear anywhere.
A fiduciary deposit is a deposit placed with one of the international banks on behalf of another agent bank. They are used in the following cases: if your money is kept in an account with a foreign bank and you decide to temporarily transfer part of the funds to a Russian bank. But you don’t want your name to appear in documents or withdraw money from a foreign account.
According to market participants, such transactions are being made more and more often.
In Russia, Zenit, Otkritie, Uralsib and Rosbank are among the leaders in the fiduciary deposit market. Similar services are provided by almost all banks.
But they are popular only among the wealthy segments of the population. This is understandable, not every Russian today has accounts in foreign banks. The average size of such a deposit is about $ 1 million.
Benefits of fiduciary deposits
The key benefits of fiduciary deposits are as follows:
- they ensure confidentiality and security: such a deposit is opened by a bank on behalf of a client in another financial institution, while the client's name does not appear anywhere;
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the possibility of obtaining additional income, because interest rates on deposits in Russian banks are higher than, for example, in Swiss banks - 8% versus 4%. After the 2008 crisis, the rate in Swiss banks on deposits in euros was about zero
Due to the fact that fiduciary deposits involve large investments, the bank rate on them may be higher than the base one. It is determined on an individual basis.
Disadvantages of fiduciary deposits
Among the disadvantages of fiduciary transactions are the following. A fee is charged for fiduciary transactions. Swiss banks, on average, charge for their services from 0.25 to 0.75% or 5% of the profit received on the deposit. The first case applies if you find a bank on your own and agree with it on the terms of the deposit, the second - when using the intermediary services of the bank. It is worth noting that the 5% commission practically negates the entire economic sense of the fiduciary deposit.
All risks of possible bank ruin under such a transaction are borne by the client - fiduciary deposits are not included in the deposit insurance system, because formally, this is a common interbank transaction.
