In today's world, people are increasingly in contact with financial institutions such as banks.Sometimes it comes to consumer credit or payment of utilities, but often a desire to open a deposit account its own name.To date, bank deposit is one of the most popular ways to save and guarantee a stable increase in cash among individuals.It can not hide that all of us are driven by the power of the love of money and to increase their number in our wallet.This is the main reason for the love of the country to deposit products.
Faced for the first time with the "long" list of bank deposits can be a bit confused and entangled, that is really the best.But over time, you begin to understand the significance of the beautiful phrase "capitalization of interest," and that is the best option to get the most amount of money.Let's take a closer look at this concept.
Capitalization of interest - a reckoning interest to the deposit amount with a certain periodicity indicated in the contract, bringing the amount of the deposit by the end of the term is much "growing up."Simply put - it is the interest on the percentage that the financial sector is called "compound interest."
At first glance, it seems that the contribution to the capitalization of interest brings more income.In fact, such a conclusion is ephemeral, because usually only works in the case of equal annual rates.Naturally, the monthly capitalization of interest allows you to get a higher income compared to other types of deposit interest rates the same, only without the capitalization, and save money at the expense of chargeability accrued interest.And it's very good for the consumer, and therefore so much.
capital contributions are now offering all banks, without exception, because this option is the most popular among individuals.According to the statistics, seven out of ten of deposit products - with capitalization, the only difference between them - the frequency of charging.More popular monthly capitalization of interest, as well as quarterly.Capitalization of the Company are interested no less than the people.After all, if there is free money in circulation, why not invest in the bank and then get a certain amount of money that is in the "economy" come in handy.
Initially all the advantages of such deposit products seem obvious, especially the rate of return for the same amount of investment and interest.But do not forget that the advantages and disadvantages of both, determined in comparison with analogues.Very often, a deposit interest rate cap is lower than that in some cases, puts it in the same rights as another form of investment.That is, in both cases you can choose the interest rates so that the "efficiency" of the deposit with the capitalization and without, will be the same.
Capitalization of interest will give the customer the maximum income, if you choose between the contributions at the same rate.Only in this case it will bring unique profit by an average of 0.5-0.8% a year.That is, long-term deposits increased advantage of compound interest.
By choosing a deposit product should be approached wisely, especially if a decent amount of cash.It is one thing to receive interest at least $ 10, but quite another if by 1000. This is a notable difference, and do not want to lose her.So remember, some basic simple rules, which should be guided in choosing the type of deposit.
Interest capitalization work one hundred percent, if the rate is in line with other products without compound interest.So, learning products, pay attention to the absolute value of the interest, and capitalization.And do not forget about the term of the deposit and the frequency of interest, because of these factors, the final income depends not least on the bet.
And another thing, the main disadvantage of deposits with compound interest is the absence of the possibility of early termination.That is want ahead of time to return your money, all interest will be converted at the rate of deposit "on demand".And this is in essence a penny!
apply to the bank for the first time to determine the optimal deposit, you can ask the staff to calculate the yield of the most favorite options for contributions.In general, this choice should be guided by their own objectives, that is, if there is a purpose of the accumulation of money - interest capitalization fits you perfectly!
