Time deposits for three years or one year?
Having money deposited in the bank should not be rare in today’s society. Compared with foreigners who spend as much as they want, smart people still have a very strong awareness of saving. After all, if you have a certain “spare fund” on hand, you can better cope with special situations when they occur. Although there are now various financial products in addition to deposits, bank deposits are still the most trusted in most people’s minds.
Needless to say, everyone knows the reason. After all, the safety of bank deposits is high enough. Even if the interest rate is slightly lower, the principal and interest are guaranteed. The financial products are different. Starting this year, the rigid redemption of financial products has been broken. To put it bluntly, banks cannot guarantee the interest rate. In this case, choosing a bank fixed deposit is naturally a “guaranteed profit but no loss”.
However, even for time deposits, there are many considerations, including the choice of deposit period, which will affect the interest earned.
In many people’s minds, the longer the fixed deposit term, the higher the interest rate. However, internal staff said frankly that it is not as cost-effective to deposit in a bank for three years as for one year. Why is this? No matter whether the fixed deposit is for 1 year or 3 years, they have their own “disadvantages”. After reading about these disadvantages, I believe that you will have an idea of how to choose a depositor. Of course, you can only make money if you choose the right one.
Choose 3 years for a fixed deposit
It can be said that banks will encourage depositors to save for a longer time. When handling time deposit business, employees will not recommend customers to save for one year.
On the surface, it seems that if you choose a three-year deposit, the interest rate that savers can get is indeed higher. It is the bank that really “benefits”.
Because in the process of interest rate liberalization, most banks have raised deposit interest rates. If you have more funds on hand, the interest rate will be higher. For banks, if customers choose a three-year deposit, they don’t have to worry about the loss of funds in the short term. Because depositors who choose a three-year term are not in a hurry to use the money, then the bank will naturally have sufficient capital flow.
But if you think about it carefully, the liquidity of choosing a 3-year deposit is still very poor. Although the interest received will be higher than that with a one-year term, the money cannot be withdrawn in advance. Once depositors urgently need money to withdraw money in advance, they will lose a lot of interest.
Choose 1 year for a fixed deposit
Savers who choose a one-year term have arrangements for their funds. From the advantage point of view, one-year deposits are more flexible. Of course, this kind of short-term deposit itself focuses on the liquidity of funds. The disadvantage is also obvious, that is, the interest rate obtained is too low.
Moreover, many financial products have a one-year term, and some staff may deceive depositors to achieve performance. Many people regard financial products as deposits, only to realize that they do not choose deposits when they want to withdraw cash later.
For the employees, the results were achieved, but the depositors’ feelings were not taken into consideration. Once an insurance financial product is chosen, the surrender of the policy at a later stage may cause losses to the principal. From this point of view, savers must choose carefully. If you have spare money and are not in a hurry to use it, it is naturally more recommended to choose a 3-year fixed deposit. However, the funds in hand are not much, and if they may be used at any time, it is better to choose a one-year term.
Of course, you must confirm with the staff before depositing and do not apply for financial management or insurance products. It will be troublesome if the funds cannot be withdrawn or the principal is affected.
If you found this post insightful, please share it with someone who might benefit. Thanks for your reading. Share your thoughts, and suggestions, and help shape a better experience. If you find it inspiring, share it with your friends give it a ‘clap’ and follow. Let’s build something great together — drop your comments below!
