understanding Savings Deposits

 understanding Savings Deposits

understanding of deposit: deposits are similar investment products / savings accounts offered by the bank to the public. Excess savings deposits is the interest rate banks are given greater than normal savings products but the money has been deposited client should only be withdrawn after a certain period of time. Deposits commonly known as time deposits.

After knowing the definition of deposits, let's compare some of the deposits with other investment products.

Deposits are investment instruments with less risk. Through investment / savings deposits , you can keep the principal amount of money you invest . This is in contrast to investment instruments in the form of stock and bond investments , where there is the possibility of the principal amount of both the investment can be reduced . Principal amount depends on the movement of interest rates . When interest rates move up , bond prices go down . Similarly, stock prices , which also depend on market conditions . Every time there is political instability can lead to changes in the price of the common stock in the form of a decrease in stock price . 
Therefore, if you have investments in time deposits , your investment will be safe from the decline in value of the principal , even though interest rates move up and down . Fluctuations in interest rates will only affect interest income that you receive , not to decrease or increase the principal amount of money you invest .

Savings deposits can also serve as a long term investment and short-term. By investing money in a term deposit, you have the option maturities of one, three, six, twelve months or twenty-four months. You will be subject to a fine (penalty) and not get any results if you withdraw funds before the maturity of the deposit. Thus, if you intend to use the money delam short term you should open a savings. Due to the opening of savings, your money can be taken at any time without a penalty.
  
 However, you should know that the savings rate is normally lower than the interest rate on bank deposits. However, rather than saving money under the pillow, would save money in the bank will be more secure in accordance with the timeframe required option.

 The money you save in the bank , which meets the requirements of the government , are 100 % guaranteed by the government of the risk of failure to pay . The guarantee scheme was put in place by the government for a period of time can not be determined . You do not have to worry about losing the money you save when the bank is closed or taken over . The Government will be responsible for ensuring that your money will be paid back according to the amount you save . 
Time deposits are also available in several foreign currencies . Save partly in the form of dollars for unexpected needs and open deposits denominated in U.S. dollars for long-term purposes . You may worry about the fluctuation of currency exchange rates on USD deposio you , but if you are too conservative , the money you put in will not be enough to compensate for inflation . You will lose purchasing power due to the currency exchange rate is very low . If you need the money in the form of U.S. dollars yag future will come , you should save the money in U.S. dollars .

 Investment / savings deposits are relatively safe and conservative. However, you should not only invest in deposits only in your investment portfolio. Diversifikasikanlah investment portfolio you have. If you tend to be conservative, stick to the portion of a larger time deposits and other small portion in bonds and stocks.