“Bigbank”: not to succumb to inflation, but to invest wisely

If we invest money in a term deposit or in a savings account – it is no longer just saving, but also earning, and is equally applicable to companies as well as individuals. In addition, investments can be an important financial management tool for companies, as they allow increasing cash flow, increasing profits, as well as reducing risks related to liquidity, which moreover, money that is just “lying” in a current account will be slowly eaten away by inflation.

Despite the fact that the European Central Bank (ECB) has reduced Euribor rates for the second time, “Bigbank” in Latvia still offers the best rates for individuals and businesses. You can also make sure of that On the “Latvijas Bankas” website, where the deposit interest rates offered by credit institutions are collected.

The Bank of Latvia updates the information in the register at least once a week, on the first working day of the week. Information is obtained automatically from credit institution websites.

However, it should be expected that sooner or later, taking into account the decisions of the ECB, these rates may also change, so now is the time to “catch up” the opportunity.

One extra step is worth it

The most stable strategy for dealing with the company’s free cash is to invest part of the money in the shares of several companies in the future, however, it is important to diversify the portfolio, that is, not invest only in companies of one company, one sector. or one field. Another part of free funds can be invested in bonds. However, it would not be wise to invest all free assets in stocks or bonds. To ensure quick access to money, it would be better to keep part of the money in a savings account, where they will be available in a few days, or in a time investment, which allows you to understand that the money working for you. .

It should be remembered that the deposit guarantee law ensures the payment of compensation for all types of deposits in all funds up to 100,000 euros in each bank, in the case of “Bigbank” is the provider Estonian Guarantee Fund.

Here are seven important factors why a company should choose to invest in one of the financial instruments:

1. Profit maximization

Businesses often do not use all their capital for day-to-day operations. These free funds can be invested in various financial instruments such as term deposits or deposits to earn interest income. This increases the company’s overall profits because capital is employed even if it is not directly used in business operations.

2. Reducing the impact of inflation

Money that sits unused in an account loses value due to inflation. Inflation reduces the purchasing power of money, so the company’s assets become less valuable. Investing or saving money with returns can offset the negative effects of inflation.

3. Ensures liquidity and reduces risk

Effective asset management, including liquidity planning, is essential to ensure that a business has resources, for example in emergencies. Investing free cash in short-term financial instruments allows you to maintain liquidity while earning interest, thus improving the financial stability of the company.

4. Financing growth and expansion opportunities

Deposits and investments can be a long-term strategy to finance business growth. Profits from financial investments can be used to finance the implementation of new projects, technological development or the construction of new markets.

5. Optimization of financial management

Properly structured investments improve financial planning and budgeting. The company can predict and control its cash flow, thus allocating resources more efficiently for operational needs and long-term investments.

6. Multiplication

By investing in different financial instruments, a company can create a diversified portfolio that helps reduce risks. Diversification means that even if one type of investment is not profitable, other investment channels can compensate for it.

7. Increases competitiveness

A company that is able to use its assets effectively will be more competitive. Financially strong companies can react more quickly to market changes, invest in innovation or offer better products and services.

Choose the type of investment that best suits your needs

“Bigbank” in collaboration with the market research company “Norstat”, the data of the survey* of entrepreneurs conducted in April this year shows that more than half or 58% of surveyed Latvian entrepreneurs admit that free money is “sleeping” in their accounts, and another 20% – they have not thought about the opportunity to invest financial resources.

82% of companies working in the arts and entertainment sector do nothing with free money, followed by construction – 74% – and real estate companies – 75%.

At the same time, most companies that use one of the types of investment, such as investing in stocks, bonds, deposit money in a savings account or in investmentin the field of information and communication services (44%) and finance and insurance (44%).

Survey data shows that there are various reasons why entrepreneurs do not put money to work. The fifth part or 22% of the respondents are worried that they will not be able to access financial resources in case they are needed, 20% do not really believe in the growth of real money, but today many opportunities to make the company’s money work and earn.

When choosing an investment product, a company should assess its needs and risk tolerance to maximize profitability and liquidity. Each of the financial instruments or both together can help the company to achieve specific goals.

If using savings accounts or time deposits is a very new practice for an entrepreneur, you can try it as an individual to get to know the results and ensure the benefits.

Savings account – free and just a few clicks away

One of the ways to make money is to work savings accountwhich allows free access to money. It is a very flexible cash storage device and is suitable for those funds that have been set aside for emergencies or unplanned expenses. In the savings account, you can postpone the money that is not needed for operational activities, but that may be needed on certain dates, for example, salary payments, or for construction managers, it can be savings for special house repairs.

Funds in a savings account it can be accessed in one bank business day and without penalty interest. Interest from the deposited amount will be credited to the account every month. In addition, one-time and regular donations can be made. Both opening and maintaining a savings account are free, and can be opened simply – online.

Easy to fill out the application Big Bank.lv on the home page. It only takes a few minutes. A bank specialist will contact you shortly, who will clarify the data and ask you to complete the customer data questionnaire. After all the documents are received, they will be checked and the contract will be drawn up. After we approve the contract, we will agree on a suitable identity in person or online, sign the contract with eSignature and the company will be able to transfer the money to their savings account.

There is no minimum deposit amount for the savings account.

“Bigbank” investment rates are the highest on the market

Term investment they can be binding if the company wants to invest free cash and generate additional income. However, it is important to remember that when investing the company’s free money in an investment, it is necessary to expect that the money will be accessible only at the end of the term.

Interest rates offered by “Bigbank” are consistently higher than the average in the market – 4.4% for 12 month deposits, while the average rates in Latvia – 2.5%-3.5% annually . In addition, “Bigbank” deposit registration, maintenance and service are free of commission, and the minimum deposit amount is 500 euros.

Find out more about savings account and deposit – big bank.lv

For more information and consultations: +371 25603154, [email protected]

* The survey of entrepreneurs “Norstat” was conducted between April 12 and 17, and 255 respondents were surveyed. Answers were given by company owners or board members (70%), company managers/CEOs (17%) and CFOs (13%).