The travel and assembly restrictions caused by the pandemic have created additional free money for many households, so the question arises as to the most profitable and safest ways to save them.
The options are varied, from cash savings in the home to investments in cryptocurrencies, which have experienced rapid development in recent years. It is important to note that one of the world’s largest economies, China, is actively pursuing cryptocurrencies, which resulted in a 30% drop in Bitcoin last week to $ 30,000. China is tightening its loop around the cryptocurrency, so the safest solution would be to look in the direction of more traditional deposits, such as time deposits.
Cryptocurrency security risks
Although the Financial and Capital Market Commission has repeatedly come to the attention of transactions in which individuals may commit cryptocurrency fraud by addressing investors with advertisements on the Internet or by telephone, offering to buy various cryptocurrencies, some people are still actively interested in investing in cryptocurrencies. They also enter the traditional financial system.
The issuance and circulation of cryptocurrencies (“Bitcoin”, “Ether”, “Ripple”, “Tron” and “Eos”) in Latvia is not regulated, but fraudsters continue to advertise investments in cryptocurrencies on the Internet using the names and images of well-known persons or licensed companies. This is probably one of the reasons why China is so active against this type of deposit, having recently publicly stated that cryptocurrencies are not available in the markets because they are not real, and added that companies are not allowed to use cryptocurrencies to set prices. various goods and services. Moreover, neither theorists nor practical researchers are able to explain the coverage of these currencies and are unlikely to be able to do so in the near future, whereas traditional currencies have gold or other types of coverage.
Clouds thickening above the head of cryptocurrencies suggest that it is safer to store additional free funds in other ways. The type mentioned above – cash savings in housing – will not be the most appropriate way for the 21st century. This would be the second ditch in terms of cryptocurrencies, so the golden mean will definitely be the most recommended.
Essential criteria for comparing services
Time deposits, which, unlike the cryptocurrencies already mentioned, will be a safer option for people who want to make a deposit without having to make a special commitment or do not make too much of the funds currently available, as there is a state-guaranteed time deposit. The term deposit service in Latvia is offered by a relatively large number of banks, so when choosing the most suitable one, it is necessary to evaluate – what are the minimum and maximum deposit terms, what are the interest payment conditions and, of course, what are the deposit rates. Exactly deposit rates for different banks are very different – from AS “Citadele banka” 0.05% per annum to the rate offered by AS “Expobank” SmartDeposit platform up to 1.60% per annum, which also offers the formula – the longer the deposit term, the higher the interest rate, as well as, the longer the term, the more favorable the interest rate. The platform also offers the possibility to make deposits completely remotely, which is not insignificant nowadays, and they are protected by the Deposit Guarantee Law.
There is a risk that you may even have to pay extra for storing money in the bank, for example, SEB’s term deposit interest rate is 0.00% (therefore it is not possible to make a profit), but you have to pay a monthly fee of 0.70 euros per month. will reach – 8.40 euros. Of course, it must be borne in mind that the value of money can fluctuate, but the European Union’s monetary system is relatively stable and fluctuations in the euro or the dollar will never reach the level of the fallen currencies.
When choosing where to make a deposit, attention should also be paid to whether the service provider has incurred hidden costs, such as servicing and maintaining a time deposit account. It is also important to study the sanctions, for example, in cases where money needs to be withdrawn earlier.
Compared to cryptocurrencies and keeping money in a sock, the banking service undoubtedly provides a guarantee of security. The Deposit Guarantee Law stipulates that each customer is guaranteed a compensation of up to 100,000 euros per person if the deposit cannot be accessed. Keeping money in the bank will also help to avoid spontaneous and ill-considered purchases.
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