Among the many banking services, the most popular among the population are various types of cash deposits. Funds transferred for a fee to a banking institution for a certain period on the terms of their return are called a deposit. In a modern economy, a deposit allows you to save money and protect it from depreciation.
Deposits are usually divided into two broad categories: demand deposits and time deposits. Having placed funds on demand in the bank, the client has the right to receive them back at any time. This money can be cashed, transferred to an organization or another person without time limits. The remuneration that the bank charges on this type of deposit is relatively small, and it is charged on a quarterly basis or when the deposit is closed. Usually, deposits of this type are used not so much for accumulation as for the safe storage of funds.
The second type of deposit is a term deposit. There are long-term, medium-term and short-term deposits. Funds placed on a term deposit can be withdrawn only after the expiration of the term specified in the agreement. The interest paid to the client by the bank for the use of his money within the agreed period is significantly higher. Moreover, the longer the period for which you place money on the deposit, the usually higher the bank interest.
The main advantage of a bank deposit in comparison with keeping funds at home is reliability and safety. In addition, the money lying "in the stocking" does not bring any income, inflation gradually eats it up. The deposit allows you to save money from this trouble, since the interest on deposits usually either corresponds to the inflation rate, or even slightly exceeds it.
Different banks and for different types of deposits provide different ways of calculating interest on the deposit. They can be credited to your account monthly, quarterly, as well as at the end of the year. Some types of deposits involve compound interest. In this case, keeping money in the bank for a long time is especially beneficial, since as a result of regular capitalization, the deposit can increase very significantly.
Before deciding to deposit your funds, consider how long you may need them. Carefully study all the options for the offers of the bank you have chosen and familiarize yourself with the terms of the agreement. This will avoid unnecessary troubles, save you time and money.
