More profitable way to keep savings. A bank deposit or bond?

Everything is very individual - it depends on the amount, conditions on the deposit and bonds, your knowledge of economics and politics. Bonds are more suitable for professional investors or large corporations, banks, etc.

Both of these things have one pro - it is a guaranteed on payments. The state insures bank deposits up to a certain amount, so that in any case, you will return your money back in the event of a bank crash, as well as bonds (meaning government bonds). Here we take for granted that a non-payment can only occur in the event of a collapse of the country or an unusual situation (for example, deposits in Cyprus and bonds simply burned out) - but the same risks are essentially the contribution. So in this regard they are identical.

However, the pros of the deposit are that at any time you can take it back (often without losing a percentage), just as if the state insures deposits, then you can not put money in reliable banks (very low %), and placed in a completely reliable commercial bank, so the winnings here come in 3 points:

1. This is a higher % than on government bonds. loans
2. Liquidity of money - at any moment came to the bank and took the deposit (anything in life can be)
3. The possibility of accruing a complex % on the deposit -% on %.

With regards to bonds - there are actually agreed upon conditions for the transaction, as a rule coupon payments once a month / quarter / year, i.e. until it expires - you do not cash out money - this is the first con. The other con is that there is no insurance for corporate bonds, i.e. only state ones remain, but there is quite a low %. Which leads to a loss of profitability is the second minus.

To the pros of bonds, they also exist, but for people who are quite wealthy and competent

1. This is their trading on exchanges, i.e. You can buy cheaper than face value, make money on exchange rate differences - i.e. in fact, they can act as a trading tool (though in this case it is better than stocks)

2. These are guarantees for payment by the state, ie regardless of the amount of money will be paid (usually)

3. You can take a loan from many brokers, leaving them as collateral, thus building an investment pyramid. For example, you have a 2% return on them (for example, a Western issuer. You take a 90% loan from the cost of these bonds from a bank or broker, so you get coupon income and use the loan at a ridiculous rate, conditional 1-2% per annum, which is not bad.

So here, as it is written at the very beginning, the situation is twofold. I think for most people, even for the wealthy, a bond-pledging scheme is beneficial, however, in practice, I have not seen who does this (except for corporations, of course) - so I think it's best to keep money in a bank, because the amount is small most likely and especially there is no point in breeding the pyramids. And if the amount is greater, then what for these bonds and deposits are business, there are investments in stocks, real estate and much more.

Barry Copeland

In 2003, Barry Copeland received a degree in Journalism from the University of Sheffield. He is a sophisticated financial journalist with more than 10 years of experience in the monetary business and the media.Also collaborates with top managers to consider expenses through financial research. His goal is to become a community-level organization consultant, so he plans to continue his training

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