This class of savings products, long-term deposits, can be contracted for a maximum term ranging between 3 and 6 years, in which deposits with increasing interest, structured or linked to a stock index can be selected. They have the advantage of having a very affordable minimum capital for any investor profile, under a range that goes from 1.000 to 5.000 euros approximately. And in any case, higher than those offered for shorter terms of stay.
Within this general scenario, intermediation margins can be improved in this class of savings products. Not in a very significant way, but at least by increasing these margins in a few tenths of a percentage with respect to their initial proposals. Through a payment that is fixed and guaranteed every year. Beyond other technical considerations that are inherent in these banking products.
In any case, in long-term deposits you will not detect promotions or welcome offers as happens in short-term deposits. Although the best news for your personal interests is that at all times you will have all the deposited capital insured. As one of the main differences with respect to the models derived from equities. In this way, you will be in a better position to plan your accounts from now on. Being, on the other hand, a very simple and easy to hire product.
Long deposits: lower interest
The main consequence of the drop in interest rates has been a notable decrease in the profitability of these products. At this time, its profitability moves in a range that goes 0,50% and up to 0,90% approximately. But with the need to have the money immobilized for many months, and perhaps more than you can bear to maintain sufficient liquidity in your savings account. In return, they guarantee you the totality of the deposited capital, whatever happens in the financial markets. This is a factor that will give you more peace of mind to plan your savings in advance.
On the other hand, this class of banking products is characterized by the fact that they do not allow automatic renewals. If not, on the contrary, they end when its due date. Although of course their great contribution is that they do not generate any kind of commissions or other expenses in their management or maintenance. As one of its most relevant identification signs with respect to other savings models with similar characteristics. Where they are also encompassed within growing deposits, as well as those known as structured deposits. As strategies to slightly improve the interest generated by the issuing entities of these products.
In increasing interest format
Most long-term proposals are based on providing growing interest as an incentive to interest savers. This savings model usually has an average term of 3 years and an increasing annual interest rate, where it is the owner himself who selects the settlement of his tax. Being able to be quarterly, semi-annually, annually or upon maturity. The minimum initial contribution in these products is a little more demanding, starting at 4.000 euros. The invested capital and the interest rate are also guaranteed throughout the term, being also known in advance and early cancellation is possible. With the great advantage that these models can be contracted in online formats.
Deposits of these characteristics that financial institutions have been developing allow a progressive revaluation of the investment. Improving profitability year after year and until reaching his last exercise which is where he contributes his best remuneration. In this way, the increasing deposits pallow the opportunity to iInvest the savings available at different terms, usually between 3 and 5 years, depending on the needs of each client. In the event that early cancellation occurs, the annual nominal rate will be reduced by a few tenths of a percentage and then it may no longer be profitable for the interests of small and medium savers.
Structured deposits
Other financial institutions have chosen to offer their clients other less conventional products, in most cases through structured deposits. This model in the impositions of these characteristics collects the performance depending on the evolution of the index, sector or basket of stocks to which this special term tax is referenced. With similar characteristics to the previous investment models and that can be subscribed from monterias contributions of around 5.000 euros. Without at any time having to pay any January in terms of commissions, penalties or other expenses derived from its management.
The great advantage, therefore, of this model in bank deposits lies in the fact that it will be possible to improve the intermediation margins. Although it should be clarified that these differences with will be especially striking. If not on the contrary, they will move by rather modest levels, with an increase of a few euros to the savings account at the end of the year. On the other hand, the guaranteed return is very small, around 2% or 3% at best. To ask yourself if it is really worth keeping your savings immobilized for as long as it happens with structured deposits.
Characteristics of these deposits
As with other financial products, this class of deposits has a series of advantages and disadvantages that you should know before hiring. Because in principle, these bank deposits are neither better nor worse than the rest. They are simply different and this is their main attraction to formalize them from now on.
Among its most relevant benefits are those that we expose you below:
- They usually offer a growing interest, in such a way that as the terms of permanence are longer, the better final remuneration they will have.
- They always guarantee the all of the deposited capital And in no case will you lose money, as can happen with the derivatives of the equity markets.
- There are different business strategies to improve their intermediation margins based on the profile presented by each small and medium investor.
- Course are not massively marketedRather, they are specific proposals that banks are launching to attract money from their customers.
Disadvantages of these impositions
As it could not be less, deposits of these characteristics also bring a series of disadvantages that you should take into account so as not to take any negative surprise from these precise moments. Where, not only its profitability comes into play, but other external and no less important factors in its analysis. Like the following that we point out below.
- There is no doubt that it supposes have an immobilized capital for a relatively long time. Although do not forget that in some cases they allow you to carry out partial and punctual rescues, sometimes without penalties.
- The minimum capital to subscribe it it is higher than in other models of these characteristics. Often they require a minimum contribution from 8.000 euros and onwards.
- The profitability they offer not so attractive enough to keep them for so many years. In this sense, there may be more profitable savings products at the moment, although perhaps without guaranteeing a minimum return.
- It is a product that is intended for a very well-defined saver profile: conservative client in which the security of your capital prevails above all else.
- You can miss out on real opportunities to improve your assets through other products that may be more profitable. Although at the cost of taking more risks in operations.
- Finally, one of the problems that these banking products bring is that they are very inflexible and it costs them a lot to renew their structure over the years. Of course, its variations are very few, year after year.
Secured Deposit Accounts
It is another of the modalities of fixed-term bank deposits that are less known by small and medium investors. In part, due to the special characteristics of this innovative format to make your savings profitable for the next few years. Not surprisingly, this financial product is fundamentally distinguished because it can be subscribed from a fairly affordable monthly minimum amount for households, around 50 euros approximately. So that a fairly stable savings bag can be created for the medium and long term.
It is a curious combination between an account and a deposit in the traditional sense of the word. Where, the holders need to make total or partial redemptions six months after their hiring. It also has the guarantee that you will always recover, at least, all of the money contributed in the investment made. However, in recent years the presence of this savings product in the offers that financial institutions have been developing is not very frequent. From this point of view, you will have much more trouble subscribing them from now on.