Time deposits and savings are banking products that people can choose to save money. However, these two bank products are not the same. People need to know the difference between savings and bank deposits so that they can choose and maximize bank products properly.
If you have ever been offered bank products such as term savings/planned savings, then you should know that these two products fall into the category of bank deposit products. Meanwhile, time deposits are bank products that are included in the investment product category.
In general, you need to know that the types of savings and deposits offered by banks in the community are in two forms, namely conventional and sharia. The difference generally lies in the provision of benefits to customers.
Conventional savings accounts have a wadi'ah or deposit scheme, where in principle you deposit some money in the bank, then the bank will give you a bonus or profit in the form of interest.
Meanwhile, deposits in Islamic banks have a mudharabah (profit sharing) scheme. This means that you as the owner of the funds put money in the bank to be channeled by the bank into financing (credit), then the bank's profits from the distribution will be divided with you based on a certain proportion. Where all sharia banking products (savings and deposits) guarantee that their customers are protected from the practice of usury.
1. Deposit Interest Rates are Higher than Bank Savings/Deposits
One thing that makes a very clear difference is the amount of interest rates. The advantage of putting your funds into a deposit is that you get higher interest than when you put your money in a savings account.
In 2020, the current deposit interest rate ranges from 3% to 5% per annum, while the ordinary savings interest rate ranges from only 0.0% to 1%. Not much different, savings products such as time savings also offer interest rates that are still below the deposit rates.
With this difference in interest rates, of course you will get more benefits if you save money in the form of deposits rather than in regular savings. For example, you have Rp 10 million in cash. Funds of this size are better if stored in the form of deposits, where you can get interest in the range of 3% in just 1 month of storage. Profitable isn't it?
Regarding deposit interest, you can also invest the deposit interest you get through the Automatic Roll Over system. Where later, the interest on your deposit investment can increase because of the possibility of compound interest.
2. Money Withdrawal Flexibility
As you definitely know, you can withdraw funds from your savings account at any time. This is the second difference between savings and time deposits. Because, if you keep what is in deposit, you cannot take or spend your money arbitrarily until the maturity period arrives.
So, understand, if you can't disburse money stored in a deposit at will, there is a certain period of time (tenor) that must be passed until maturity, then your money can be used.
The various deposit tenors are 1 month, 3 months, 6 months, 12 months, 24 months. Note, if you make a withdrawal before the due date, there is a penalty fee to be paid.
For example, you have a time deposit of 6 months, but you have an urgent need and want to withdraw the funds, even though this is only the 2nd month. Then, you withdraw money from your deposit account, then you will be charged a penalty fee.
So, by understanding this, now you are expected if you want to save a certain amount of money in a deposit, make sure that the money is money/funds that will not be used in the near future.
3. Deposits for Investment, Savings for Saving
Deposit interest which is higher than savings interest makes time deposits as an investment product. As an investment product, time deposit is an investment product with the least risk, but the benefits, in terms of interest rates, are also the smallest among other investment products such as stocks, mutual funds, and bonds.
Generally, people use deposits as an investment instrument of choice for saving emergency funds and education funds because deposits have a very low investment risk and are easy to understand compared to stocks, mutual funds or bonds.
For those of you who are still new to investing, deposits can be the first step in your investment. However, for those of you who are already proficient at investing, deposits can also be chosen as a diversification of investment products to minimize risk.
Note that savings products such as regular savings and term savings are not a form of investment. Because savings is a place where you put / save money that will be used to finance your daily needs, as well as savings for an emergency fund.
Flexible withdrawals, low interest rates, and monthly administration fees make savings not included in investment products. Although there is also an administrative fee in deposits, when compared to the whole, time deposits are still much more profitable than ordinary savings because the interest received is much higher.
4. Bilyet and Savings Book
If you open a savings account, you will receive a passbook with debit card/ATM card facilities as proof that you have savings in the bank. In addition, you can open a savings account with low capital starting from IDR 100,000. Furthermore, you can also use the money stored in the account for various transactions.
Well, this is different when you open a deposit. When you open a deposit product, you will receive a receipt in the form of a deposit slip. This bilyet is proof of ownership that you are the owner of the funds you have stored in the form of bank deposit products. Now, thanks to technological advances, you can make deposits online and get proof of deposit receipts in digital form that will be sent to your email.
To open a deposit you need a certain amount of funds. Generally, deposit products offered by banks in the country start with a cash capital of Rp. 8 million - Rp. 10 million. The tenor options offered are 1 month, 3 months, 6 months and 12 months.
Posts
0 comments:
Post a Comment