Saving in a bank is always one of the ways to keep money as well as generate more profit. Understanding the diversity of consumer needs, banks now offer term savings and demand savings. Therefore, customers can choose according to their needs, abilities and savings purposes.
Viewing: What is a term deposit?
So how are these two forms of savings different? How can beginners choose a suitable term when choosing term savings?
1 What is term savings?
Difference between term savings and demand savings
Tips for beginners: Should you start a term deposit in 6 months or a year
?4 Riclix.vn Term Deposit – Online savings
What is term savings?
Unlimited savings is a form of savings that allows you to withdraw money without notice. However, it offers the flexibility of being able to withdraw money at any time when needed. The interest rate on demand savings is usually lower than the interest rate on term savings.
For term savings deposits, depositors can only withdraw money after a certain deposit term as registered/agreed. The interest rate of a term deposit is always known in advance and is fixed during the deposit period. Although the ability to close the account is limited, the interest rate of a term savings deposit is always higher when calculated based on the corresponding interest rate of the deposit period.
The difference between term savings and demand savings
Two distinct differences between term savings and demand savings are listed below.
Term Savings Savings Term Savings Pre-maturity settlement The ability to settle deposits is limited within the agreed deposit period. If you want to settle and withdraw before maturity, you may incur a penalty fee and no longer receive interest on your deposit. More flexibility in deposit withdrawal. You can withdraw any time you need to use it and do not incur any withdrawal fees. See also: What Are Amino Acids – Learn The Role Of Amino Acids Interest Rates Interest rates are regulated and will be much higher than a demand deposit. Interest rates are low and are charged only on the balance at the end of the day.
Tips for beginners: Should I start a term deposit in 6 months or a year?
If you are planning to make a profit from your idle money but do not want to invest in risky investments, a term deposit at a bank is the preferred choice. The choice of the appropriate term will depend on your future need to use this money.
If you do not plan to use the money for a long time, choose a term of 12 months and 18 months to enjoy a higher interest rate. The longer the term, the higher the interest rate. The average one-year deposit interest rate ranges from 6.8% to 7.4% and the average 18-month term deposit interest rate ranges from 7.9% to 8.5%/year.
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For your first deposit, you should choose to open a savings account with a term of 6 months. The 6-month term will help you be more proactive in case of unexpected need to use. When the 6-month term expires but still has no need to use the money, you can completely deposit more with the same term and accumulate the interest rate of the last deposit with the principal amount so that your savings account can be saved. more profitable.
Whether saving with a term or a term, find out information about reputable and reliable banks with the same interest rates offered by the bank to compare and choose for yourself the most suitable bank. !