What is interest on deposits and how does this system work?

The concept of a bank deposit in simple words

A deposit is a bank deposit that is placed in a bank under pre-agreed conditions for storage and interest accrual. The client can invest his own financial resources in state or commercial banks for a certain period of time. At the same time, for the use and storage of funds, the financial institution makes interest payments, which are added directly to the total deposit amount, and can also be transferred to the client’s personal account at his request.

Both legal entities and individuals can open their own account with deposit charges. It is worth noting that not only banks are involved in processing deposits - some microfinance organizations also provide this service, but clients are not always ready to trust such institutions with large sums and prefer to create deposits in trusted banks.

In essence, a deposit is a deposit, but the difference between this concept is that in addition to cash, you can use additional bank assets in the form of valuable metals, profitable shares, and so on.

How to choose a bank deposit

First, decide what type of deposit you need: classic fixed-term, replenishable, non-replenishable, how often you plan to receive interest and how. Next, you can start choosing a bank.

All banks develop approximately identical lines of deposits, including all possible types of deposit programs. You need to choose the one that promises the greatest profitability. That is, the most important thing is the interest rate.

Many people choose Sberbank, but one must take into account that large federal banks with state participation traditionally offer the lowest level of return on deposits. It is better to choose another, commercial bank, where rates on similar products will be much higher. There is no need to worry about the safety of your funds; all banks participate in the deposit insurance program.

about the author

Irina Rusanova - higher education at the International East European University in the direction of "Banking". Graduated with honors from the Russian Economic Institute named after G.V. Plekhanov with a major in Finance and Credit. Ten years of experience in leading Russian banks: Alfa-Bank, Renaissance Credit, Home Credit Bank, Delta Credit, ATB, Svyaznoy (closed). He is an analyst and expert of the Brobank service on banking and financial stability. [email protected]

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Types of Bank Deposits

Bank deposits are available in several types. The client can open it in several forms:

1. Cash account
   . It is the most popular and sought-after form of deposit, when the investor deposits funds into a personal account and receives a fixed amount of interest according to the conditions specified in the agreement.
2. Metal account
   . When opening this deposit, the depositor deposits a certain amount, which the bank then “transfers” into precious metals - gold, silver, platinum. Interest is calculated in accordance with the current exchange rate of the metal chosen by the investor.
3. Standard safe deposit box
   . The client is given a special key to a safe deposit box in which any valuables, as well as important papers, can be stored. This deposit is carried out without accrual of interest; its essence is the safe storage of the client’s valuable property under certain conditions.

Deposits in Moscow

Each person saves money for different purposes. However, what many people don't realize is that keeping your savings at home is not the best solution. Instead of generating income for their owner, they only lose their real value due to inflation. In addition, people often do not restrain themselves and spend money. However, deposits in Moscow will help you not only preserve your finances, but also increase them in accordance with the agreement.

Today this product is a universal investment tool. Unlike the stock or precious metals market, you do not need special knowledge or constant analysis of the economic situation. You simply find a suitable offer and sign the contract. Moreover, in most organizations there are no restrictions on minimum contributions, and if there are any, they are small.

The contract itself is very important, so you need to familiarize yourself with the text in person before signing it. To do this, ask the bank employees to provide a sample in printed or electronic form and carefully read all the points, especially those written in small print and marked with an asterisk. With the help of such tricks, unscrupulous organizations try to mislead a potential client and include conditions that are unfavorable for him in the agreement.

What is the highest rate in Moscow?

The maximum rate on deposits in Moscow is 8% per annum as of 10/09/2020.

What are the advantages of deposits?

Description of important points
The main advantage of the service, in addition to a stable income, is reliability. Consumer accounts are protected by the state at the legislative level through a compulsory insurance program. Therefore, in the event of liquidation or revocation of the license, you will be paid compensation. However, it is limited to 1.4 million rubles, which does not prevent you from dividing the amount exceeding this limit and placing it in several organizations, eliminating various risks.

The next aspect we will look at is account types. The first one is urgent. In this case, you place funds for a certain period of time. Of course, you have the right to apply for early withdrawal, but with a high probability the bank will refuse to pay the accumulated interest. Moreover, this type of deposit is divided into savings and accumulative, which is intended for periodic replenishment (popularly called a “piggy bank”).

The second option - on demand - comes at a low rate. The thing is that it is not profitable for an organization to keep finances for itself, knowing that the owner has the right to demand their return at any time. Such a product is preferred by that category of customers for whom the fact of reliability is enough, and potential profits are of little interest to them.

How many deposit offers are there in Moscow?

Today there are 1223 offers in Moscow.
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On Banki.ru you will find products that are current on the market. Reliable information is collected here, which our specialists check and update daily. By comparing services according to their main parameters - the interest rate, opening cost and commission, you can make the right decision, and the ratings section will help you in choosing an organization. Banki.ru is the largest financial supermarket on the Runet, successfully operating for more than ten years. All offers displayed on this page are the best or most profitable solely in the opinion of Banki.ru experts

How is interest calculated on bank deposits?

The procedure for calculating interest may vary among some banks, but there are general principles that the client needs to pay special attention to before making a deposit. There are certain types of interest rates that have some differences:

“Compound” interest accrued with capitalization

The interest rate may remain fixed or may vary from a single threshold value. The total interest amount is added directly to the deposit body. The accrual procedure must take place at regular intervals. At the same time, in the new period, interest is capitalized - funds are accrued additionally for the amount of interest that has accrued over the previous period.

Capitalization can be monthly, quarterly or annual depending on the terms proposed in the contract.

The final deposit amount can be calculated using the formula

:

S = C x (1 + % xd/g)n

,

where S is the value representing the total amount of the deposit after interest accrual;

C—deposit body—the initial amount provided to the bank;

% - the rate prescribed by the contract / 100;

d - the total number of days after which capitalization must occur according to the agreement;

g – sum of days in a year;

n is the total number of capitalization periods provided.

“Simple” interest accrued without capitalization

The interest rate on the loan here remains fixed. The total amount of interest can be accrued monthly or at the end of the deposit term - in this case, accruals occur in a single amount and are not summed up with the deposit body.

The client can at any time use the amount of accrued interest, which can be transferred to a personal card account. The amount can be calculated using the following formula

:

where the value of P is the total interest amount accrued on the personal deposit;

S is the fixed amount of the deposit itself;

Wed — exact deposit term, calculated in days;

% - standard annual interest on the current deposit prescribed by the agreement;

365(366) - number of days in the current year.

Exotic species

In addition to those mentioned above, there are also more exotic cash deposits, for example:

• indexed - their profitability is tied to some indicator, for example, inflation, stock index or commodity prices (now practically not used due to low demand and possible negative financial results);
• mortgage - funds are accumulated on the deposit to pay the down payment on a mortgage, which is issued in the same bank (their profitability is an order of magnitude higher than standard);
• insurance - hybrids, which are a mix of standard depot and insurance, in fact - a type of investment deposits.

There is also a non-paper deposit - an impersonal metal account. The investor buys a certain amount of “paper” gold and receives income from changes in the prices of real gold. Compulsory medical insurance usually does not generate interest income, but you can earn more on them during periods of intense growth in the value of precious metals.

When choosing the appropriate type of deposit, be sure to pay attention to the conditions for accrual of profit and termination of the contract - otherwise you may lose a significant part of your income through your own fault. Each banking product “works” well in a certain situation - if you need to save money, use a replenishable or savings account, if you need maximum income - urgently with capitalization. Or wait for special offers from the bank.

What affects the interest rate?

Interest rates vary significantly from bank to bank. The amount of interest on deposits can be influenced by various criteria, among which experts identify the most important:

the presence of constant competition between banks can lead to an increase in the amount of interest accrued on deposits;

1. The need to replenish the bank financial fund
   . With an increase in the number of loans issued to the population, the bank needs additional funds and begins to attract depositors with the help of increased interest rates on deposits;
2. New financial institutions may increase interest rates
   in order to attract depositors. Large popular banking organizations rarely increase the percentage to 8-9%, attracting clients only with a high reputation and relative reliability.

Also, the number and interest rate can be affected by the types of deposits - for example, time-limited time deposits always have a higher rate.

Investment deposits

If the profitability of standard bank deposits is not encouraging, then you can always choose more profitable options. For example, invest in the stock market or OFZ. But if the investor does not yet have enough qualifications or does not want to dive deeply into the topic, then an “intermediate” option is suitable for him - investment bank deposits.

How do they work? The depositor purchases some product from a company associated with the bank - for example, mutual fund shares or an endowment life insurance policy. Next, the client contacts the bank and opens a deposit at a special rate for an amount equal to the pre-made investment.

For example, in Rosselkhozbank you can open an “Investment” deposit at 8.45% if you buy shares of any mutual funds in the RSHB Asset Management company in the amount of 1.5 million rubles, or the “Reliable Future” deposit with a rate of 8.4%, but To purchase, you need to issue an IZH policy at RSHB Insurance in the amount of at least 50 thousand rubles.

Investment contribution of Rosselkhozbank

Thus, by opening an investment deposit, you can receive additional income by investing in a profitable financial instrument (UIF), protect yourself in case of unforeseen troubles and receive income at the same time (ILI or NSZH), and also place a deposit at a higher interest rate than at regular programs.

The second type of investment deposits are structured products. Part of the investor's funds is placed on a regular deposit at a fixed rate, and part is placed in some instrument, for example, shares, futures or options. If the investment idea is justified, then the bank client receives additional profit, which may be 2-3 times higher. If it doesn’t justify it, then only a guaranteed income, usually 2 times lower than the average rates in the bank.

Types of bank deposits

There are several standard types of deposits that have their own distinctive features. There are types of deposits based on maturity, as well as target criteria.

By timing

• Demand deposit
  - this type of deposit offers a reduced interest rate, since the client can withdraw funds from his personal account at any time.
• Time deposits
  . Funds can be stored in a banking institution for up to 12 months - short-term, and up to 36 months - long-term. The interest rate here is significantly increased, but the client is limited in his rights and cannot withdraw personal savings until the end of the contract.

By purpose

• Savings deposit
  - the depositor can transfer a limited amount of funds several times a month. A deposit account allows you to significantly expand your deposit amount.
• Savings deposit
  . The client can deposit a certain amount into the account in order to preserve savings.
• Target deposit
  - this type of warehouse is opened mainly by parents for their children in order to further pay for their studies at the university. In this case, it is necessary to submit a document confirming that the training is provided on a paid basis.

Seasonal deposits

The classification of bank deposits also includes the so-called “seasonal”. These are time deposits opened within a certain period of time. For example, for New Year's deposits, the acceptance of applications for opening usually begins in mid-December and ends at the end of January of the following year. Spring ones open in May, autumn ones in September.

Some banks time the opening of seasonal deposits to coincide with certain dates - May 9, International Women's Day, National Unity Day, etc. In October 2020, Sberbank offered a “Green Day” deposit, which could only be opened for 3 days (on the bank’s birthday).

Distinctive features of seasonal deposits:

• higher rate than regular offers;
• non-standard period - 100 days, 1.5 years or, for example, 400 days, there are also ultra-short seasonal offers for literally a month;
• there is no extension;
• The account cannot be replenished or withdrawn from it.

In general, these are essentially term savings accounts with a higher interest rate.

Deposit terms

Terms of deposits vary significantly among different financial institutions. But there are general criteria for determining standard criteria that are prescribed in the agreement of any bank. The main points are:

• Basic interest rate on the opened deposit;
• The maximum possible deposit amount;
• Standard terms, payment procedure stipulated by the contract, as well as capitalization of interest;
• Possibility of further replenishment of the account;
• Possibility of early closure of the deposit, as well as its extension under the agreement.

Before opening a deposit, clients must study in detail the conditions offered by banks under the agreement and choose the most profitable option.

What to look for when choosing a deposit

If you plan to put money on a deposit, you should pay attention to its conditions so that this method of storing funds is profitable. Points to consider:

1. Deposit replenishment. This is relevant if you have the opportunity to regularly save money and want to keep it all in one place. If you have a lump sum amount, but there is no opportunity to save, then there is no point in thinking about this deposit condition.
2. Possibility to withdraw money partially. It is important that you can withdraw cash from your account if necessary, while retaining the accrued interest (which will simply accrue on a smaller amount in the future).
3. A big plus of the deposit is the capitalization of interest. This means that the amount of accrued interest and the amount of the deposit are constantly combined, and interest is again charged on them.
4. Possibility of contract extension. In this case, you do not have to close the existing deposit upon expiration of its validity, but extend the agreement for the same period if necessary. The main thing is to find out in advance whether the original terms of the contract will remain and whether it will be beneficial for you.

You should put money on deposit, understanding how interest will be calculated. There are different options:

• at the end of the deposit period (when it is closed, you will receive the entire amount along with accrued interest);
• monthly interest accrual;
• transfer of interest on the deposit to a special account (if specified in the agreement).

It is extremely important to find out whether the bank where you plan to deposit money is included in the compulsory deposit insurance program. 1,400,000 rubles is the amount that the law guarantees payment to you in the event that something happens to the bank.

Today banks are often deprived of their licenses. If this happened to your bank, then most likely a successor will be appointed to it, who will handle insurance payments. They are always carried out in rubles at the rate of the Central Bank of the Russian Federation, regardless of the currency of your deposit.

Accordingly, if you plan to deposit an amount exceeding 1,400,000 rubles, then it is better to split it into two or more parts and put it in different banks. If all the money is in one bank (even in different accounts and in different branches), then in case of problems it will be possible to return only 1,400,000 rubles.

Deposits can be opened in rubles, dollars and euros. Due to the unstable situation in the foreign exchange market, a deposit in foreign currency can save your funds, but the interest on such deposits is always lower than on ruble deposits. This is due to the fact that during an unstable economic situation, banks are trying with all their might to attract new clients and their funds in order to function normally.

It would be useful to remind you that the more famous and stronger the bank, the more reliable its reputation, the calmer you will be. Yes, now many small banks offer very attractive conditions for deposits and high interest rates. However, in an environment where banks are going bankrupt and losing their licenses one after another, is the gamble worth the candle? On the one hand, you can take a risk, make a profitable investment, and get a good profit, but on the other hand, you can get yourself into trouble and have to deal with insurance payments for a long time.

Taxation of deposits

Dividends received from a deposit may be subject to tax if the rate on it exceeds the refinancing rate set by the central bank. Some types of deposits are subject to mandatory taxation - these are ruble, foreign currency, and metal deposits.

Previously, ruble deposits were not taxed

, but since 2020, a taxation system has been provided in which, if the deposit rate exceeds 13%, tax is required to be levied.

As for foreign currency deposits, this deposit is subject to tax if the standard rate exceeds 9%. In 2020, all metal deposits are subject to taxation if they are closed earlier than after 3 years. In this case, the client is obliged to independently contact the tax office as soon as he cashes the account.

What is the difference between a deposit and a deposit?

The common goal of both concepts under consideration is the desire of a person to preserve his assets and, if possible, increase them. To the question what is the difference between a deposit and a deposit, the main answer is the type of asset that constitutes the operation.

When working with terms, you should understand that any deposit can be called a deposit, but not every deposit is a deposit. Important points to know when collaborating with banks are as follows:

• Contributions are only possible in relation to money.
• Deposits of legal entities are called deposits in the banking world. For individuals, both terms are used.
• A deposit is the placement of any items in special cells.

The terms today have gone beyond the banking sector. In particular, the concept of “deposit” is used to define the procedure for depositing a certain amount for the purpose of financial security for future operations.

“Investment” today often refers to any type of investment that aims to generate profit over time. Most often you can find the term to denote the contribution of funds to some investment fund or when collaborating with companies and buying out part of the ownership share.

Pros and cons of deposits

Main advantages

deposits are as follows:

• Constant increase in the total deposit amount due to accrued interest;
• Funds cannot be withdrawn before the period specified in the contract - this allows you to refrain from unnecessary spending and accumulate the necessary amount;
• Some types of deposits require the possibility of regular account replenishment;
• In a short time, you can significantly increase the amount of your total contribution.

Flaws

:

• There is always a risk of unexpected bankruptcy of any financial institution;
• The standard interest rate is relatively low;
• In case of early withdrawal of funds, the bank stops accruing interest on the main deposit.

Deposit rates

The economic essence of the interest rate comes down to reflecting the market value of money, which is equivalent to a certain level of risk within a particular method of alternative investment of funds. The deposit rate is considered a kind of payment for the use of temporarily freed funds for a certain period of time. The main function of the deposit rate is to compensate for potential income in other, unused areas for placing available funds. When determining cash rates, banks use not only standard formulas, but also take into account the benefits of a potential borrower from alternative methods of placing funds.

How to open a deposit - instructions

In order to open a deposit, you must first of all decide on the deposit product, as well as directly with the financial institution where the deposit will be made. Next, you need to contact the bank office and provide a standard package of documents:

• sign an application to open a personal deposit account. The form of this document is developed by each bank individually, so it is important to apply for the form at the institution’s office;
• It is necessary to provide supporting documents in the form of a passport, as well as additional documentation, the requirements for which differ from bank to bank. Some banks offer to additionally present a military ID, pension certificate, and residence permit. For legal entities and individual entrepreneurs, a separate list of documents is also provided, which is established individually by the banking institution. Before submitting an application, you must go to the company’s website and find out information on all the necessary documentation that will be needed to open a deposit.
• Next, an agreement is signed, which reflects the main responsibilities of the banking institution, as well as the rights of the client. The agreement also reflects standard controversial issues regarding deposits, as well as the possibility of their early termination.

When signing an agreement, it is necessary to take into account all the nuances, since this is where the basic requirements for the deposit and the amount of accrued interest are reflected.

How to place money with minimal risk

In order for you to be confident in your investment, you should place money in stable operating banks whose deposits are insured by the DIA . In this case, even if the credit company’s license is revoked, deposits in the amount of up to 1.4 million rubles. will be paid by the Agency. Therefore, when placing large amounts of deposits (more than 1.4 million rubles), it is better to do this in different banks, without exceeding the maximum payment amount.

Placement of funds into deposit programs by legal entities is carried out at the risk and responsibility of the clients. These investments are not insured, so it is important to invest only in the most financially stable lending institutions.

What is a deposit?

Money, various documents, and other valuables that are transferred for savings can be used in the form of a deposit. These assets can be transferred to banks for profit under specific conditions.

The deposit has several varieties

:

1. Placed in a bank as a deposit.
2. In the form of monetary contributions to any organization to pay for specific services that are mandatory. Legal persons can use these assets to make mutual payments.
3. Any financial deposit funds (in the form of precious stones, gold, futures), shares and various bonds placed in the bank can be transferred between banks.
4. Entries in the bank's books about the claims that the deposit holder has against the banking institution (claims).

What is needed to close an account

Upon expiration of the agreement, the depositor can close the deposit account in two ways:

1. Fill out an application on the official website (if such an opportunity is provided by the financial institution).
2. Visit the branch and write an application.

You can withdraw the entire deposit amount and accumulated interest in cash, request a credit to a bank card or transfer using the provided details (not available at every financial institution).

Placing a deposit in any bank involves opening a special account. It has its own name and advantages. This distinguishes it from other types of accounts in financial institutions for individuals. They allow you not only to store, but also to accumulate amounts.