You can approach retail banks in different ways, i.e. positive or negative. The fact is that banks are guarding the economic order, making basic saving instruments, forms of lending available to all people, and simply extensive financial care. Can you treat a bank deposit as a long-term investment instrument?
How to optimize its quality at all to gain the most in the long run?
Investing is always taking some risk for uncertain future oriented profits. Bank deposits do not contain uncertainty. Their repayment is guaranteed not only by a retail bank, but generally by the Bank Guarantee Fund supporting the maintenance of security throughout the economy. However, bank deposits fit perfectly into the risk management standard. They can improve liquidity without losing earning potential.
Let’s wait for you to wait for a change in the capital market trend and for now your money is not used. In such moments, in order not to lose liquidity, it is worth choosing cooperation with a retail bank. There are also no contraindications for the deposit to be combined with other capital market instruments.
The most popular combination is a deposit plus the purchase of shares on the Warsaw Stock Exchange. More and more retail banks are making available investment funds related to bank deposits in order to increase the potential of cooperation with the client.
What does this mean for you?
A structured deposit directs some of the capital to a safe place, and the rest of the money is spent by the investment advisor on more risky ventures. Banks indicate that such deposits must be opened for a longer period. Most often, the contract stipulates that you give the bank a specific capital with a guarantee of payment in the event of failure, e.g. after five years. However, you can never be sure that you will ultimately gain.
For this reason, a structured deposit is an interesting instrument, but dedicated to prudent clients who will not sacrifice all accumulated financial surpluses here. In business practice, bank advisors rarely have better returns than the market average. At banks, you also pay a commission for capital management.
Therefore, it is worth learning how to set up deposits on your own, e.g. via the Internet and securities games. Then you will adjust profitable structures more to your individual risk level.
Learn to save and invest at the same time
Return rates on bank deposits are obviously not stunning, which is why the article signals the element of combining basic savings instruments with capital market instruments.
Thanks to this, although you increase the risk, you are able to generate much higher profits, taking into account the longer term. Saving should be converted from time to time into professional investing. Deposits are just the first step to financial independence.