In this article we are going to talk about deposits.

To increase their savings people, use different ways of investing. Bank deposit accounts - one of the easiest and most affordable options to make a profit. How to choose a deposit product and not to miss what documents need to be prepared and when the bank is obliged to transfer interest - all this should be studied thoroughly.

What is deposit?

If we talk about determining what deposit is, it is a finance transferred to a credit institution (state or commercial) for a specified period in order to generate income. To do this, a deposit account is opened where funds are stored, and accrued interest is transferred there.

As a savings tool, a contribution helps you to make a profit. According to the agreement, the depositor provides the bank with the money for the fixed term. Financial institutions are also interested in raising funds from legal entities and ordinary citizens, since they subsequently conduct financial transactions with borrowed funds, sending loans for a larger percentage of loans. The difference between paid and received interest is the profit of the bank. So banks, being a kind of intermediary between borrowers and investors, earn money.

Deposit can be in form of money as well as in form of securities, precious metals, stocks, bonds, etc.

If the goal - to extract profits, it is worth figuring out what a term deposit is. The main difference - it opens for a specified period, and during this time the depositor has no right to withdraw the invested money from the current account. If he does, then interest on deposit products is charged at the rate of "asking". True, in our time, some banking institutions attract customers with increased interest rates in case of early withdrawal of funds.

The urgency of a deposit account affects interest rates - the longer the time deposit, the higher the rates. You can withdraw interest on a monthly basis or capitalize on an account. A short-term deposit after the expiration date can be transferred to a minimum rate or automatically continue for a new period - it is prescribed in the contract. With regard to the payment of funds, it is also prescribed in contractual obligations.

Fighting for each client, financial institutions offer different conditions to attract money for a deposit. All of them are registered in the contract and among them one can distinguish the main points: interest rate on current deposit; minimum and maximum amount; the terms and procedure for payment or capitalization of interest; possibility of additional replenishment of current account; conditions for early closure or prolongation.