Deposits are one of the most profitable options for saving and investing in banks, both for the bank and the customers themselves.
Time deposits themselves have more advantages compared to ordinary types of savings. One of them is the higher interest rate offered. However, it is different from the usual type of savings. You cannot take this deposit at any time, aka you have to take it according to the time period.
Are you interested in opening a deposit at a bank? The following are the advantages and disadvantages of Bank Deposits that you can take into consideration:
Advantages of Bank Deposit
One of the most profitable investment facilities
If you are a moderate type of investor who doesn’t really like high-risk investment instruments. So, deposits will be one of the best types of investment for you.
Deposits offer a stable rate of return with low risk. In contrast to stocks or bonds that have a high risk.
For the place of deposit itself, it would be better if you choose a bank that has been guaranteed by LPS and supervised by the OJK so that the level of security is higher. You can place deposits at BRI, BCA, Mandiri, BNI, and other official banks.
Why should you keep a deposit in a bank that is guaranteed by LPS? If one day the bank you choose turns out to be bankrupt or bankrupt, LPS can guarantee funds from each customer who feels disadvantaged up to 2 billion and the interest rate can reach 7.5% for each existing bank. And these things only apply to LPS guaranteed banks.
Interest rates are higher than ordinary savings interest rates
The next advantage of Bank Deposits is that the interest rates are higher than ordinary savings. So this will be very beneficial for you.
Easier to Access Deposit Interest
Although in fact you are not allowed to access money or withdraw it freely and at any time (time deposit). However, currently there are several banks in Indonesia that provide convenience for their customers by taking interest from their deposits by transferring to the desired account.
That way, you can get regular income in the form of interest that is deposited at a certain time.
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As previously discussed, these deposits have less risk than other investment instruments such as stocks or bonds.
Controlling Impulsive Spending
If you are one of those people who are extravagant or tend to spend more money on various unnecessary consumptive expenses. So, you can try to secure your money in this type of deposit savings. With a deposit, your money will be safer because you can’t take this money at any time.
Helping you prepare money for future needs
For example, you currently have 50 million rupiah. The plan is, in the next 1 year. You will use this money as tuition fees or for various other needs.
In this 1 year period, if you are afraid that your money will run out. So, you can just deposit it with a period of 1 year. Well, in the next 1 year you can withdraw this deposit for your needs.
Disadvantages of Bank Deposits
Although there are many advantages of bank deposits that you can get. However, in fact, deposits in the bank itself still have some drawbacks. Among others are :
Have low returns
In line with the low risk, deposits also have lower yields. When compared to the usual type of savings, the profits on deposits are indeed greater. It’s just that, when compared to the rate of return on stocks and bonds. Deposit returns tend to be lower.
Weak against inflation
Second, deposits are quite weak against inflation. If the inflation rate is very high, then the deposit interest rate you receive may not be meaningful and will not provide any financial benefits.
For example, Indonesia was hit by quite high inflation in 2013 which reached 5.9%. Meanwhile, the average deposit interest rate at that time was only 3.5% to 5.5%. Plus there is a tax discount of 20% of interest for deposits above 7.5%. That way, the deposit interest you receive will not have a big impact on the principal value of your deposit.
You will be penalized if you take deposits prematurely
You cannot take time deposit funds at any time, if you are forced to do so, you will be subject to sanctions or fines. This sanction will certainly make you lose money, you will also lose interest on the deposit.
Bank deposits are also somewhat less flexible, both in terms of taking it and in terms of the value of the investment. You cannot increase the value of the deposit. The deposit itself can only be given once at the beginning of the deposit opening.
Opening a deposit in a bank has many advantages and disadvantages. The advantages of bank deposits themselves include: as a fairly profitable investment vehicle, higher interest rates compared to ordinary savings interest rates, easier access to deposit interest, less risk, controlling impulsive spending, and helping you prepare money for future needs. future.
Meanwhile, the disadvantages are: it has low yields, is weak against inflation, you will be penalized if you take deposits prematurely, and it is less flexible.
That’s all the information this time, hopefully it’s useful…