New bank deposits: advantages and disadvantages

New bank deposits advantages and disadvantages

One of the concerns of conservative saver that has brought together several thousand euros in his bank account is how to extract the maximum return, make their money work while not need to spend.

To do this, you must know not only the classic choices such as deposits or savings accounts, which increasingly offer less performance, but also scan and analyze the new products offered by the market, as referenced deposits, gift, foreign exchange, online and foreign banks operating in Spain, and that they too are some good choices. These five are analyzed with their pros and cons in this article.

In 2015, most of the deposits to time deposits and interest-bearing accounts traditional banks offer a fairly negligible profitability, which only in some cases, such as very tight deadlines or connected clients may exceed 2%.

In this context of low interest rates, savers are starting to look conservative new investment products and open up new options.

However, before choosing the best tank in each case, it is essential to know the limitations and peculiarities of each.

1.Deposits on line

The online banks, who came to Spain in the late 90s, are starting to enjoy a widespread acceptance because, besides having the same guarantees as entities off line and pursue a policy of zero commissions, banks are best They offer yields today.

Its strong point: all profits, up to 3% APR, without charge. Its weakness: unlike physical entities, the profitability of the online products is not negotiable and, of course, this deposit is not suitable for not very Internet-savvy savers.

2. Deposits gift

Some banks offer gifts instead of remuneration in exchange for keeping intact savings deposit during a specified period. At present, the gift deposits allow to obtain tablets, DVD, coffee, smartphones, cameras, kitchen sets, bicycles and other consumer goods, more or less value depending on the deposited amount and contract term.

Its strong point: gifts can be very attractive and the latest technology. Its weakness: 19.5% of the value of the gift (19% from 2016) is removed from the cardholder’s account by way of IRPH sign nothing the deposit.

For example, if the tablet gifted has a market value of 100 euros, the Treasury will retain 19.5 euros. In addition, they may charge for postage and finally, stay or time required by the bank for the gift can not be provided with the actual market value of the object.

3. Deposits in foreign currency

If it is common that Spanish banks offer deposits in euros, in some cases the offer can also be made in other currencies, such as US dollars and pounds sterling. The foreign currency deposits can give a good profit, if the foreign currency of choice in hiring appreciated against the euro in the months duration of the deposit.

It happened otherwise, and losing value, the final payment will be reduced.

Its strong point: it is an option for those who have savings in foreign currency. Its weakness: Generally, profitability is lower and above the customer assumes the risk of the exchange rate.

4. Deposits referenced

They are a kind of gamble, because the client only gets the profitability announced, if the indexes or underlying shares of stock, which are announced in the pre-contractual information of the referenced tank, reaches a certain value between the trade date and the expiration Deposit.

Its strong point: the customer offer higher yields than the average of deposits, ensuring 100% of your money. Its weakness: in most cases, if the conditions outlined in the contract are not met (as the Euribor or a block of shares rise in value), the client a return of 0% APR takes, despite having retained their money for months or even years. And sometimes not allowed to withdraw the money in advance or even pay a penalty.

5. Deposits of foreign banks

There are at least three types: the banks from other European countries to become Spaniards to be guaranteed by the Deposit Guarantee Fund (FGD) Spanish up to 100,000 euros per holder; those who remain foreigners, but Europeans, and then they are guaranteed by the Deposit Guarantee Fund of their country (Portugal, Holland …) as well as 100,000 euros per holder; and deposits of banks from outside the EU either have become Spanish and are backed by our FGD or have opened headquarters in a city such as Luxembourg to have a European FGD that, on balance, enabling it to offer the same guarantees that it would have on our country.

Its strong point: as they are in the process of expansion and seek to attract customers, their offers can be very attractive. Its weakness: there are people that banks in countries like Greece can not instill much confidence.

In summary…

All previous deposits have in common that guarantee 100% money saver. The difference is in the actual return they are able to provide. The saver looking to increase their money should consider, in order of preference, online deposits, foreign and referenced, followed fairly far behind by foreign currency deposits and, Finally, deposits in deposits species also known as gifts.

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