Shares/Stock Bank deposits

[greenieS]

Bank deposits are the safest investment currently available.

They offer much higher interest on deposits than you would have received if you had the money deposited in a standard savings account.

There are banks on the market in our country that offer yields of 3.8% per year (after taxes). Pretty good.

The best part about these bank deposits is that they are insured, according to the European legislation in force, up to a limit of 100,000 Euros per individual, per bank.

So, even if the bank responsible for managing your account goes bankrupt, you will be compensated by the Bank Deposit Guarantee Fund.

Due to the low level of risk and the fact that access to money is relatively easy, bank deposits can be a good choice for those who do not need money immediately and are willing to block their money held for a longer period of time.

Risks

Deposits are considered safe investments. However, they do come with some risks, although some are small, which is true.

For example, there is the risk of reinvestment. When interest rates fall, investors will receive less money if they reinvest the amounts and interest from one deposit to another with lower interest rates.

At the same time, there is the possibility that while you have a bank deposit in progress, the interest rate will increase, and you will have the money stuck at lower figures than the current ones.

To avoid these risks, we advise you to use the "ladder technique": Invest your money in several deposits that come at different time intervals - 1, 3, 5 years.

Keep in mind, too, that inflation and taxes will erode the purchasing power of money in a deposit over time.

Liquidity

Financial investments

Bank deposits are not as liquid as bank accounts, because your money is normally blocked until the deposit matures.

However, if the need arises, you will be able to withdraw them early, with the risk of losing the annual interest rate you would have expected and the application of a minimum interest rate, according to the contract in force.

 

[Good-Guy]

I do not think that bank deposits could be really safe and there are various reasons for that. First of all, bank deposits are not reversible. Even if bank deposits were reversible, you may still have a risk of losing your money if the account holder withdraws all the money from the account before you could make a claim. Moreover, I do not think that all bank deposits are insured up to 100,000 Euro in my country. Insurance companies in developed countries might offer such insurance rates, but I do not think that banks in my country provide that much insurance.

 

[Alexandoy]

I agree that bank deposits is a very safe investment if the amount of the deposit falls under the maximum amount of the Deposit Insurance which is $10,000 in our case. That amount is applied per depositor and not per account,. That means if you have 3 accounts worth $10,000 each then you can only claim for 1 account if the bank crashes. The interest earning of a bank deposit is very minimal and not really worth it. However, I have to be honest that most of my money are in my bank account as of the present. I am still studying stocks and probably I would be putting my money in stocks for my lifetime investment. It looks like buying blue chip stocks is much better than the money deposited in the bank because the earnings are substantial to my standard. What do you know? The stocks I am considering is owned by my bank which means I can trust the stocks because it is owned by the biggest bank in our country.