Everyone knows that a bank term deposit is a financial product in which the client delivers an amount of money to a credit institution for a period of time in exchange for a certain interest rate. It is included within the models based on fixed income and is very popular because it guarantees the savings of its applicants, plus a small profitability at this time as a result of the cheaper price of money. For this reason, your average profitability in the last year it was 0,10% in periods of less than 12 months. With the consequent dissatisfaction on the part of the depositors.
But what some small and medium investors do not know is that term deposits can be tied to the stock market to improve intermediation margins. But abruptly, if at least so that they have a greater appeal among bank users. In addition, this strategy can be carried out with just one security or with a basket of shares or even linked to the most relevant indices in the world. As for example, Dow Jones, FTSE 100 or the same Eurostoxx 50. There are practically no restrictions in this regard. The most complicated thing is that they are marketed by the banks themselves.
From this general perspective, the mechanism provided by this savings product is somewhat different from those of term deposits. And therefore it is very convenient that you know it in case in the next few you feel tempted to hire any of these products. Because you should know that term bank deposits linked to the bag continue to maintain a period of permanence that can be of 24, 30, 40 or even more months. In any case, what you will never see is an imposition of these characteristics in very short terms. Of course not because it is simply not possible due to its special characteristics.
Taxes, linked to the stock market?
The existence of this remarkable link is due to improve profitability thereof. Uniquely and exclusively because on the other hand its design remains the same, I leave some differences that we are going to show you from now on. A factor that determines it to be this way is the fact that the stock market has become a very popular product among small and medium investors. Where practically all of them are aware of their operations and how shares are bought and sold in the financial markets. This is a point in favor of the design of these models aimed at savings and beyond other technical considerations.
On the other hand, bank term deposits and those linked to equity markets guarantee at all times the economic contributions of customers. It is true that the most common bank deposits are those of fixed interest. Where its profitability remains unchanged until the end of the deposit term. In those linked to equity markets, these same constants follow, guaranteeing a small minimum return. T also with a previously defined term of permanence and that in all cases must be scrupulously observed. But with the sensible difference that the interest can increase if the financial asset to which the deposit is linked achieves its objectives in its price.
What interest can they provide?
One of the questions that savers ask themselves is the benefit that they can obtain from contracting these savings models. Well, it will be a direct function of the value of the shares, indices or stock market sectors linked in the operation. But with a maximum cap that rarely exceeds 5%. Poro as long as the conditions of this link are met in the bank deposit. If not, the depositor will not lose a single euro of their monetary contributions. The interest rate agreed with the bank will even go to your checking account.
On the other hand, there is a factor that must be met under any circumstance and that is the duration of the bank imposition. Whether cancel early the user will have no choice but to face a penalty for the development of this movement. This is something that can discourage people who are interested in hiring this product for savings. Not surprisingly, it is one of the main differences with respect to another class of bank term deposits. Beyond other considerations to do with its operation and that can lead to other debates regarding its formalization.
Is it only tied to stocks?
Of course not since it is open to other financial assets from the stock market, as we have commented previously. In this way, the depositor has the great advantage that he can choose the product that best suits his profile as a saver. Although it is also true that the offers are not very numerous at the moment. If not, on the contrary, they are limited to a series of basic formats. Namely, there is no great plurality in this class of banking products. Despite the fact that it is a model that has been installed in offers and promotions by credit institutions for many years.
Another of the most relevant aspects with respect to this level of linkage is the one related to the geographic location thereof. Since they are also open to international financial markets, where proposals from the old continent prevail. From this perspective, there is no doubt that it is possible to invest in the stock market without the need to be involved in buying and selling shares on the stock market. Without assuming, of course, the risks of the latter's operations. As a more defensive strategy to be present in the equity markets.
Requirements to access
In any of the cases, contract an imposition of these characteristics does not require too much effort for savers. If not rather the opposite, because they maintain the same properties of the more traditional or conventional bank deposits. From these common approaches, it must be emphasized that this class of products are very easy to contract for all profiles of bank users. Well, we show you what you have to do from now on to subscribe any of these banking products:
- Be a customer of an entity that sells a bank term deposit and for which a current account to carry out the charges of the operation.
- Have the necessary economic amount to face this operation and to which the charges of the possible commissions that it includes in its contracting clauses must be added.
- And finally, be of age as is the case in many of the most important banking products.
If you meet all these simple requirements, do not doubt that you will be fully available to sign the contract for these savings models. Beyond other technical conditions that its formalization can generate. You will have verified that you will not have many problems to make the savings profitable through term deposits. Not surprisingly, it is one of the advantages provided by this saving model so frequent in bank offers.
Is it profitable to hire them?
In any case, it will be necessary for you to consider from now on whether it is profitable to hire this special class in term deposits. Because on the one hand, without a doubt you will have options to improve performance traditional that these banking products generate for you. In any case, you will be sure that you will obtain a fixed return no matter what happens in the financial markets. It is a point in favor for saver profiles with a more defensive cut and that can incline your choice to the detriment of other more complex or aggressive formats.
And on the other hand, you will not have all the revaluation that can be obtained in the equity markets. If not only a little with respect to the rises that the basket of shares linked to the subscribed tax may experience. In this context, if what you want is a large profit, of course you are not looking at the desired product. Among other reasons because you will never be able to exceed benefits and that is generally situated at 5% levels. Because if what you want is to invest your money in the stock market it is better that you go directly to the purchase and sale of shares in the financial markets.
Another aspect that you must analyze to know if the subscription of these deposits is beneficial is if you can spend so much time with the money invested. Not surprisingly, their terms of permanence are excessively high, especially when compared with other more conventional bank deposits. Because it may not compensate you to carry out these operations at such long terms in their duration. Beyond other technical considerations that you will have to assess from these precise moments. Because a lot of money is at stake.