Guaranteed deposits belong more to the area of investments, but several domestic banks also created their savings part.
These are deposits where two or more parts of one deposit earn interest in several possible ways.
Guaranteed deposits submitted by domestic banks have built-in elements of a current savings account with an investment instrument. The entire deposit is insured, so the client will not lose his money in the event of a bank failure. The only risk borne by the client is not attributing the interest rate to the guaranteed deposit.
How high is the first deposit of the guaranteed account
At least 10,000 USD can be deposited on guaranteed deposits. The average lowest deposit is between 10 and 50 thousand u¨sd.
The principle of operation of guaranteed deposits
Guaranteed deposits function as investment programs of individual banks. They buy, for example, commodities (oil, cocoa, gold, grain, meat), trade in energy or stocks. Banks use the money invested in guaranteed deposits for business transactions. According to their results, they then attribute revenues. The client bears the loss only up to the amount of income. The deposited amount is paid back to him after one to four years of the guaranteed deposit.
The restrictions for the client are the following: the absence of free disposal of money that is in guaranteed deposits. If the client wants to cancel the deposit, he will pay the bank a predetermined penalty.
Guaranteed deposits are charged. Usually a few percent of the amount invested. Part of the guaranteed deposits has a set so-called minimum return. It varies in tenths or units of a percentage of the amount deposited.
What are premium deposits
Guaranteed deposits can also be called premium deposits. The premium means the return that flows to the owner of the deposit over the pre-promised interest.
Tax test for investments in guaranteed deposits
When investing in guaranteed deposits, it is necessary to take into account withholding tax on income. The bank will pay the tax automatically.
Term vs guaranteed deposit
The main difference between a term deposit is that the entire deposit is remunerated at a predetermined interest rate. This may change during the term deposit. However, changes in the rate result from a term deposit agreement that the client concludes with his bank or credit union.
Conversely, the return on a guaranteed deposit is usually uncertain in advance. Before the start, the client has only a rough outline of the possible development of the interest rate. This may change during the duration of the guaranteed deposit.