Savings certificate: interest and conditions

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

There are a large number of different financial instruments in the world that are designed to save and increase our funds. They are both relatively safe and risky. The first category is the savings certificate. What does he represent? What is the mechanism for working with it? All this will be discussed in the article.

General information

Let's start with a definition. A savings certificate is a security that certifies the amount of the deposit that was made to the bank, as well as the right of its owner to receive funds at the specified time in the agreed amount. Such certificates may be registered or bearer. They can be kept at home or left for safekeeping in a bank.

Quite often, inexperienced people confuse deposit and savings certificates. It should be understood that they have significant differences. So, for example, bearer certificates do not participate in the deposit insurance system, and if the bankburst, the owner will not be able to return their money. Therefore, it is advisable to purchase these securities in reliable structures. For example, a savings certificate from Sberbank is quite attractive due to its combination of profitability and ease of cashing out.

How to use securities?

Use this financial instrument under the power of any individual. But when issuing savings certificates, certain benefits are not provided that exist when pensioners / students open deposits. However, this is offset by high returns. If the savings certificate provides for the issuance of funds to the bearer, then it can be presented to another person. Such a security is easy to transfer by inheritance. There is no need to draw up a will: if the security is kept in a bank, then children must present a certificate of inheritance in order to receive it.

It's a bit more complicated with a named certificate. In the event of its transfer to another person, it is necessary to draw up an agreement on the assignment of claims, or, as professional financiers call it, an assignment. If the certificate is accepted as a gift, then it is considered the income of the new owner and is subject to 13% personal income tax.

On certain moments

Savings certificates of banks are seen as an alternative to conventional deposits. They have an important advantage - higher interest rates. But this is offset by a number of inconveniences that are not present when working with deposits. One such inconvenience is the lack of insurance. The likelihood that a reliable bank (for example, Sberbank) will be deprived of a license is very small, which cannot be said for less reliable banks.

The certificate is convenient because it can be used as a gift to relatives or friends. In this case, it is better to take a non-personalized certificate. It can be left in a banking institution for safekeeping, this service is free. These securities are convenient for retirees due to the fact that they are easy to pass on by inheritance. But, unlike a deposit, a savings certificate must be carefully stored. After all, if it becomes unusable or breaks, you will have to conduct an examination. What can we say about loss. In case of loss, it will have to be restored through the court.

Let's say a word about interest

The percentage depends on the amount deposited and the term of placement. Let's take a Sberbank savings certificate as an example. The interest from it will be compared with the possible profit from a simple deposit. The maximum placement period is three years, the minimum is only 3 months. The maximum you can earn on a deposit at Sberbank is 5.63%.

What about the certificate? If its value does not exceed 50 thousand rubles, then you will have to be content with a small percentage - only 0.01. The deposit, no doubt, wins. If you purchase a certificate worth up to a million rubles, then a person can count on a profit of 4.95 to 5.25%. This is already relatively comparable, although it has its own conventions. Already starting from the amount of onea million rubles, of course, wins a savings certificate. Interest dripping on it starts at 5.75% and ends at 7.1%. But the latter option is possible only for those who have a certificate worth more than 100 million rubles.

Savings certificate to bearer

This is a rather interesting and specific variation, so it needs some extra attention. You can get this security (and indeed any savings certificate) not in all bank branches. First you need to clarify where to apply. You can do this by phone. Then the order of actions will be:

1. Contact the department that carries out transactions with this type of securities. You must have a passport or other document that proves your identity with you.
2. Determine the number of purchased certificates, their denomination and term. As mentioned above, the resulting interest rate depends on this.
3. Pay for the certificate in cash or with funds stored in the selected bank.
4. Get a savings certificate.

Why are they so popular?

An important advantage of savings certificates is that they allow you to overcome inflation. People are attracted to them by the liquidity property, that is, at any time after the end of the agreed period, the client can withdraw his money. It is for this property that the certificate is valued so highly. But we must not forget about the shortcomings. The certificate is a security, and if the financial institution that issued it goes bankrupt, the owner of the certificate will be left with nothing. Therefore, when choosing a bank, you need to be very careful and cautious. If at least something is suspicious, it is better not to risk it.

Why are there fans?

The considered financial instrument has quite a large number of admirers. What attracts people to savings certificates? Perhaps, first of all, it is necessary to mention such a moral factor as working with a security. Agree that having a security in the form of a certificate is much more prestigious than just a deposit. Also, its owner can apply to a financial institution at any convenient time. The bank will not be able to refuse him, moreover, by law he is obliged to redeem the security on the day of the client's request. This very favorably distinguishes the situation under consideration from working with deposits.

And one more important point: in case of an early break, the client should not lose the earned interest that was dripping before. Although it will not be superfluous to make sure that this clause is in the contract.

And another important point! The certificate is a security. And this means that it can be presented by the client to other banks or business partners in order to convince them of their solvency. A savings certificate can even be used as collateral for a loan. But if the paper is registered, then most likely you will have to contact a notary,to certify the transfer of ownership.

Conclusion

If you have a desire or may need to use a security, it is better to issue it to the bearer. After all, such a document can be easily pledged, donated, sold or issued as an inheritance. This allows for the mobility of the deposit. However, you need to be very careful not to lose this document, because even someone to whom it was not intended at all can use it.

It would not be superfluous to note such a minus as weak functionality. What is meant by this? The fact is that a savings certificate cannot be replenished in the same way as it is done with a deposit. It cannot be converted into a current account or partially cashed out. In other words, receiving a gain in liquidity, certificate holders cannot claim the technical innovations that deposits possess. Therefore, before purchasing such a certificate, you need to weigh all the pros and cons.