What is the difference between a savings account and a deposit: comparison, description and features

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The economic crisis in the country has passed, financial life is gradually getting better. There was an opportunity to save money. How to save up for a dream? A proven and reliable way is to open a deposit. For comparison, let's take a savings account that is not so popular because of its novelty. What are these financial instruments? What is the difference between a savings account and a savings account? How to use them correctly and who is best suited for them?

Contribution

This way of earning income is safe and accessible to everyone. The yield on deposits over the past two years has halved and fluctuates in the range of 6-7%. Compared to stocks and bonds, the returns are low. But the risk of losing money and not receiving legal interest for depositors is much lower, and even tends to zero.

Deposit (or deposit) is a currency or ruble account that is opened in favor of an individual or legal entity for a period fixed in the contract and at a specified percentage. On the deposit, the depositor places money and keepsaccording to the stipulated time. A client who has entrusted his money to the bank can withdraw and collect it at any time. The conditions for terminating the deposit agreement are agreed in advance, and the bank's client is notified about them.

Types of deposits

Each client, placing funds on deposit, is guided by personal needs. According to the preferences of customers and the capabilities of banks, deposits are divided into several types. Categories depend on various factors.

Term of placement

1. On demand. The client can withdraw this deposit from the bank at any time he pleases. The interest rate on such deposits is minimal and amounts to 0.5% per annum. Interest is what distinguishes a deposit from a savings account. Accommodation conditions vary greatly. Usually, the amount must not be less than the minimum allowed balance on the deposit in order to accrue interest. The contract is drawn up without a statute of limitations, and the bank has the right to change the percentage unilaterally. Often used when concluding transactions or transiting large amounts. The probability of a sudden demand for funds is assumed. Therefore, access to them is always open.
2. Term deposit. When placing money on this type of deposit, the term and percentage are discussed with the client in advance and fixed in the contract. Deposit terms range from one month to five years. If desired, the client has the opportunity to withdraw funds, but, as a rule, this is not profitable. The depositor loses all the interest, or some part of it. Placement target will not be met.

Interest calculation method

1. At the end of the term. This method is used more often than others. The agreement contains the deposit rate, which does not change during the placement period. Interest is paid at the end of the term.
2. Capitalization. It implies the accrual of interest every month or quarter. The amount of accrued interest is added to the funds of the existing deposit. Interest is again charged on the increased amount. This happens every month (or quarter). With the same interest on deposits, with or without capitalization, the amount of accrued interest is greater for deposits with capitalization. This is not profitable for the bank, so the interest on deposits with capitalization is set less. The difference in the end is completely absent or insignificant. When prolonging the deposit for a new term in automatic mode, capitalization also occurs automatically.

Placement currency

1. Ruble deposit. Placed in rubles.
2. Currency deposit. Placed in the currency of the client's choice. The most commonly used are the dollar and the euro. Interest rates on these deposits are currently extremely low. On average, this is 0.01% for the euro and a little more for the dollar.
3. Multicurrency. This deposit is opened as standard in three currencies: rubles, dollars and euros. If desired, the client can independently move money between accounts within the deposit. This is how those who make money on the difference in exchange rates act.

Procedure for keeping funds

Basic, what is differentdeposit from a savings account, these are the rules for keeping money on a client's account. Term deposit has additional conditions governing the use of funds in the process of storage.

1. Deposit without the possibility of replenishment and withdrawal. This deposit usually has the highest interest rate. There are both with and without capitalization.
2. Deposit with the possibility of replenishment. Used to save money. It is impossible to withdraw money partially from such a deposit.
3. Deposit with the possibility of withdrawal and replenishment. Such a deposit is used to store large amounts, but without implying accumulation. The interest on them is higher than if you keep money on a debit card, but there is a minimum balance. This is the amount that must remain on the deposit. As a rule, when opening a deposit, the client can choose the amount of the minimum balance.
4. Specialized. Limited offers for VIP clients, employees of partner enterprises. Banks create seasonal offers to attract customers, which are valid once and are not introduced again.

Savings account

With the development of the financial system and the arrival of a stable economy, cash has ceased to be the only safe way to store it. If the deposit and the debit card have already come into common use, then the savings account is little known. Based on the name, it is obvious that this account implies the receipt of income from the balance of funds on it. It is used in most cases by plastic card holders. What is the difference between a savings account and a deposit?

Why do customers need a savings account

Usually this banking product comes with a set of services when opening a debit card. For the client, the benefit of having it is obvious, since the interest rate on a savings account is higher than interest on the balance on a plastic card. In practice, there is no accrual of interest on the balance of a salary card or a simple debit card at all. If the client has a salary, savings account or deposit, an increased interest rate is possible.

The presence of a savings account disciplines the client in spending. With the help of this financial instrument, the client leaves the balance on the card for everyday use, and sends the surplus to the savings account.

Savings account makes it possible to store large amounts not on the card for security purposes. Nowadays, fraudulent activities with cards have become widespread. Separating the amounts coming to the card has already saved many people from losing money.

In case of urgent need, the client can use the Internet bank or mobile application and withdraw the required amount from the account or transfer to another bank.

How to use an account without a card?

What is the difference between a savings account and a deposit? The meaning of using this type of account without a card disappears. After all, it is included in the list of services when opening a debit card.

Nevertheless, large banks have such an opportunity. Money from the savings account can be withdrawn both in cash and non-cash. Some financial institutions limit the amountincoming funds and available for withdrawal without using a debit card. If there is a need to withdraw money from the savings account directly, it is better to clarify in advance about the availability of a commission.

Which is better, a savings account or a deposit?

Currently, banks are actively promoting a new financial product. Often, interest rates on savings accounts are higher than on deposits. The percentage depends on the service package to which such an account is connected. The period of storage of funds and the amount of the account balance also affect. What is the difference between a savings account and a deposit? The main advantage of the first is the absence of a regulated period of use. The amount of money required for storage is also not established. The account holder independently decides when and how much to withdraw from the account. However, this fact may affect the interest rate.

A deposit that gives the right to withdraw and deposit cash into an account is rare in banks. This type of deposits involves a lot of restrictions that interfere with the owner. Restrictions on the amount of withdrawal of funds or the term of placement. In this regard, a savings account is a more flexible financial instrument. The client has the right to deposit and withdraw money an unlimited number of times, while receiving interest on the average monthly balance.

Plus in the placement of the deposit - a fixed percentage at the time of opening the deposit. It is prescribed in the contract, so the bank does not have the right to change it unilaterally. A self-respecting organization strictly implements this principle. By accumulativeThe account does not have a fixed percentage. It tends to change during the period of use of the savings account. Depends on the refinancing rate and financial policy of the bank. This percentage difference explains what is more profitable, a deposit or a savings account.

Recommendations

Financial consultants, when choosing a tool for storing clients' money, are based on needs. When solving the problem of what to choose, a savings account or a deposit, decide why you need to save money? A common reason to keep money with the older generation is “so that nothing happens and interest drips.” In this case, a reliable financial instrument is a term deposit. By placing money for a short term and at a fixed percentage, older people can be sure of their safety and profit. Do not forget about the sum insured. The Deposit Insurance Agency protects funds in the amount of 1,400,000 rubles. This amount is calculated per person in one financial institution. Moreover, a married couple who is officially married is also considered as one individual. Therefore, it is better for a husband and wife not to deposit two amounts in the same bank, exceeding 1,400,000 for two.

If the goal is to save money for housing or an expensive purchase, the best tool is a term deposit with the possibility of replenishment. So you will save money from your own encroachments, as a result, it will be easier to accumulate the required amount. The interest on this type of deposit is usually higher than on a savings account.

And if the goalsthere is no accumulation, and funds are used continuously - a savings account is your way out. This financial instrument is flexible and modern, it gives you access to money at a convenient time and the rest will not lie idle. The interest on the savings account is calculated monthly and capitalized with the amount on the balance.

In closing

It is better to entrust the formation of a client's financial portfolio to professionals. If there are concerns about their competence or a desire to figure it out on your own, remember that it is better to distribute funds among different sources of income. Send some to a savings account, distribute some among deposits, place something for a long time in life insurance or investments. At the same time, figure out in advance what is the difference between a deposit and a savings account, or between stocks and bonds. Money will not be at risk, being in one place. A good specialist will study all the offers of banks to find the most beneficial for the client.